Christchurch QV May Statistics With New Zealand Market Comment

Christhchurch Property Trends
Property values in Christchurch declined by 8.1% over the past year (calculated over the three months ending May 2009 in comparison to the same period last year), an improvement on the 9.6% annual decline reported in April. The average sale price for the city decreased slightly from $342,929 to $339,695.
These annual numbers need to be treated with caution, as the same period last year was a time of decline, measured against the month ending May 2009 which shows a period of flattening. So by default the numbers will show a recovery.  It is a positive sign as far as market sentiment goes, but it is still too early to tell whether this 3-month stabilisation is the start of an extended levelling-off period. The small decrease in the average sale price is easily skewed by the mix of property being sold, so although this has limited value, it does reinforce a flattening in the market.
Suburban Christchurch has held well, with the central, northern, eastern and hill suburbs all showing an ease in the rate of annual decline. The central and northern suburbs are showing the largest recovery of 2.7 per cent” Mrs. Swallow said.
Mrs. Swallow of QV says “Anecdotal evidence from different market segments suggests the level of activity to be strong under $350,000, which typically represents the entry-level and investor part of the market. This is followed closely by the $350,000 to $600,000 market segment, which generally represents the next step up the property ladder for most people. The market segment of properties priced over $600,000 appears to have the least amount of activity. Again, this needs to be kept in context as it represents a much smaller part of the market overall. Properties over $1,000,000 are very slow to sell in Canterbury at present”
It seems as though job security is still the key driver behind purchase decisions at present. This lack of security, coupled with the normal seasonal variation, means we expect to see a continuing pattern of consolidation over the winter period
Property values continue to stabilise
The QV national residential property indices for May showed an 8.1 per cent decline in property values over the last year, a considerable improvement on the 9.2 per cent decline reported last month. This is the second month in a row where the year on year change has improved.
This improvement is due to continued stabilisation of property values in recent months, and contrasts significantly to a market that was declining sharply twelve months ago.
This latest trend as I pointed out in my last blog post is unlikely to continue. So if you need to sell, sell now!

Auckland Region -7.6% $483,397 Hamilton -7.5% $346,274 New Plymouth -5.4% $319,073 Palmerston Nth -8.9% $274,418 Christchurch -8.1% $339,695 Queenstown -8.4% $600,414 Invercargill -10.3% $205,552				Whangarei -12.8% $327,073 Tauranga -9.4% $425,621 Rotorua -9.5% $267,342 Napier -8.9% $311,373 Hastings -9.7% $295,508 Wellington Rgn -7.4% $424,411 Nelson -6.7% $333,812 Dunedin -5.4% $264,180
		New Zealand -8.1% $371,555 Annual Property Value Change Average Sales Price

source QV

What is the Market Doing Now?
The last property slump was in the early 90’s and in that time New Zealand experienced a mass exodus with immigration figures at one stage peaking at close to 40,000 (decrease) in a 12 month period. This created a surplus of housing and resulted in subdued sales and lower prices. At least through this recession migration figures have stayed in the positive. The lowest point was in February 2008 recording a net increase of 4600 over a 12 month period. Figures from Statistics NZ show seasonally adjusted net migration rose to 2,030 in April from 1,690 in March and is running at 9200 over the past 12 months. So with net migration figures in the positive, and still growing, it will only be a matter of time before this influx creates buyer demand and turns the property market from a “buyers” market to a “sellers” market.
Interest Rates – They are on the move so be prepared to act fast.
Longer term interest rates are still continuing to rise. This is a bit of a concern and disappointing for those who like to lock in long term. However the short term rates are very attractive and offer some significant savings. I wouldn’t expect to see any significant reduction in long term rates as the market is pricing in at the higher levels now. With the enormous amount of “money printing” by Governments around the world the next problem will be inflation. And that means higher interest rates. So fixing at 7.5% now may actually seem cheap in 2 or 3 years time as interest rates may escalate. Clients who have fixed for 4 or 5 years over the past 6 months will be on a winner if this eventuates. Whether you fix short or long will depend on your situation and strategy so don’t hesitate to call if you want some advice in regards to your situation.
Current interest rates
6month 5.45
1yr 5.50
2yr 6.25
3yr 6.99
4yr 7.50
5yr 7.99