Today QV (Quotable Value) released their November Data on the New Zealand housing market and it’s fair to say that these statistics will have a few in this industry a little happier, but I feel the need to think is there more to it. QV have said this:
QV’s November statistics for the residential property market report a 6.8% decline in national property values over the past year (calculated over the three months ending November 2008 in comparison to the same period last year), the same level of decline as reported in October. The average New Zealand sale price for November dropped slightly to $375,408.
“This month is the first time since August 2007 that the annual change in property values has not dropped further than reported the previous month. Although this appears positive, it is still too soon to say that the market is recovering” said Blue Hancock of QV Valuations.
“While interest rates continue to fall sharply tighter lending criteria may be dampening any immediate impact on the property market. The strength of the Christmas retail season will be a good indicator of public sentiment and how hard the recession is hitting. Many businesses are currently feeling the pinch, and uncertainty over job security will be a major factor in whether people buy or sell property” said Hancock.
“Looking back we can now see that the market peaked in late 2007 then remained flat for six months. Most of the 6.8% decline in annual values occurred during the winter months and we may be seeing signs of a slight spring recovery. House values are now at the same level as March 2007, and remain higher for most people who purchased prior to that” said Hancock.
Most of the main centres are also showing some positive signs. In the Auckland area, property values are down 7.4% compared to the same time last year, which is a slight recovery from the 7.7% decline reported last month. Hamilton City also recovered slightly to -8.5% from -9.0%, the Wellington area rose slightly to 6.0% from -6.1%, Christchurch to -7.4% from -7.8%, and Dunedin to 7.6% from 8.2%. Tauranga was the only main centre to decline further to 8.4% from 7.9%.
The change in values remains variable in the main provincial centres. Whangarei ( 8.0%), Gisborne (-9.6%), Hastings ( 4.5%), New Plymouth ( 6.0%), and Palmerston North ( 9.0%) have all decreased less than reported last month. Rotorua ( 10.3%), Napier (-5.9%), Wanganui (-6.8%), Nelson (-6.2%), Queenstown Lakes (-12.5%) and Invercargill (-7.7%) all declined further.
So what do you think. This is my opinion. I believe we are still to see the true effects of the credit crunch. I don’t think that property prices are necessarily going to drop too much further but I do believe there may be more forced sales and some very motivated vendors with tight credit problems. This will give the buyer out there an opportunity to buy a property for what probably would be considered a good price. I see this trend continuing well into 2009. By maybe the middle of 2009 we might see more activity when the wholesale finance market levels out and debts recovered to a point where banks and lenders can lend credit again on sensible terms.
At the end of the day if you have your property on the market at a price which is reflective of all the surrounding conditions we face today you shouldn’t face to many hurdles when it comes to the business end of selling your home.