QV’s Residential Price Index for October shows that property values in the Wellington region have continued to slide, falling 3.4% since March this year. In contrast, values increased by 3.6% in the five months to March.
Consequently, values now sit 0.6% below the same time last year, and 6.5% below the market peak of early 2008 as the graph below illustrates:
Mr. Pieter Geill of QV Valuations said; “Although our usual upsurge of spring activity is late this year, our Registered Valuers in Wellington get the feeling that the housing market may just be starting to pick up a little pace. We are not talking any sort of drastic turnaround here, but with better weather in recent weeks, we may start to see some people who have put off their property decisions starting to reconsider their options. Our phones have certainly been busier over the past couple of weeks”.
“Interestingly, we have noted that the little extra expendable income some have from the recent tax changes is helping when applying for finance. For those who were on the borderline with their loan approval, this may be all that is required to tip the scales in their favour. Conveniently for these people, there are plenty of sellers out there who are willing to discount in order to sell. It seems reality has hit home for some, and those who find themselves in a situation where they have to move on are going to lengths to ensure a sale” Mr. Geill said.
“There is still a lack of investor activity in Wellington’s property market. There seems more stock coming to market recently, which may have the effect of creating an oversupply in lower price bracket or investor-type suburbs if there is no counter in demand” Mr. Geill said.
“For homeowners in Wellington, uncertainty around a re-structuring public sector may well be having an effect. This has certainly contributed to the lack of activity over September and October, as well as the resulting value slides. Many are content to just wait and see what happens, and not make any major decisions just yet” Mr. Geill said.
“In the QV Rating side of the business, work is being completed on the updated rating values for some areas of Wellington. Upper Hutt rating values have already been issued, and these obviously reflect the changes in our property market over the past three years. Our rating valuers find that most homeowners are not surprised in the general decrease in rating values. Porirua City homeowners should expect their updated rating values this week, whilst Hutt City ratepayers will receive theirs in December” Mr. Geill said.
QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates inline with the mix of properties selling in upper or lower price brackets. The average sales price for the Wellington region in October was $450,084.
SOURCE: qv.co.nz
