QV's Residential Price Index for September shows that property values in the Auckland region are relatively stable, having dropped by only 0.9% since March this year. In contrast, values increased by 5.3% in the seven months up to March.
Consequently, values now sit 4.3% above the same time last year, but 2.6% below the market peak of late 20
Glenda Whitehead of QV Valuations says: "Activity within the Auckland residential market remains decidedly dull. Interest rates appear not to blame, and as this slow activity perseveres, perhaps we are beginning to see a fundamental change in attitude within the market.
"There is no doubt that with limited likelihood of capital gain in the short and maybe medium term, owners must see the costs of selling an existing property as a real factor. This cost of sale could be the cause of inflexible asking prices, while the likely lack of capital gain is holding down offer levels. Perhaps we have something of a stalemate, with the exception of more motivated vendors. We have also received reports of more vendors selling privately, thus reducing selling costs," Whitehead said.
"Also to note is the impact of the tax changes to the property market. It is still unclear whether these have slowed turnover, or changed the compositional mix of active market participants. Given there is much talk about debt reduction and would-be participants sitting on their hands, this may be a more influential factor than the tax changes themselves. Many of our clients are simply re-financing, confirming this focus on debt reduction," Whitehead said.
"From within Auckland City we have mixed feedback, reflecting the many local and suburb-level trends. In some areas there seems to be a backlog of listings, but contrasting this are reports of a lack of quality family homes on the market. Overall it seems as though buyers continue to lack urgency, probably based on the wider market consensus that it is a buyer's market. However, some brokers indicate an increasing number of buyers are getting bank pre-approvals, so there could be some pent-up activity in the pipeline," Whitehead said.
"Property values in South Auckland have generally stagnated over the past couple of months. This is reflected by subdued activity and cautious buyers, despite some banks relaxing their lending criteria recently. Investor suburbs like Otara, Mangere, Papatoetoe and Manurewa generally appear to have reasonably good turnover of sales compared to other suburbs. This is in part due to the large presence of mortgagee or forced sales. QV's registered valuers note that there is an increasing trend of owner/occupier buyers looking at investor suburbs like Manurewa, Otara and Mangere. This may be due to buyers moving into more affordable suburbs; downgrading their expectations to meet their financial circumstances with more negotiation power in forced and mortgagee sales," Whitehead said.
"Within Waitakere City, QV valuers sense a slight lift in market activity over the past fortnight, perhaps due to a shortage of stock in many of the popular suburbs such as Te Atatu Peninsula and New Lynn. First time buyers are noticeably more active now, and a small number of investors are looking at their buying options. There is also more construction occurring in a number of Massey subdivisions. Anecdotally, there appears to be fewer mortgagee sales in this wider area," Whitehead said.
"On the North Shore, values appear stable after downward pressure several months ago. Transaction levels have remained low as many people continue to sit on the side line, and sale times appear to be extending. Mortgagee sales continue to be noted in many suburbs," Whitehead said.
"The market for lifestyle and rural properties in South Auckland continues to be depressed, with properties staying on the market for long periods of time, and sale prices indicating that values continue to slip further," Whitehead said.
QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Auckland region in September was $520,862.