The housing market remains mired in a glut of properties, uncertain buyers, static prices and weak sales volumes, according to Quotable Value’s (QV) price report.
It showed average housing values rose 0.1% in the three months ended May – the same as April – with the average value staying close to $914,000, down 1.1% on a year ago.
QV operations manager James Wilson said prices and sales were not changing much, but there were signs the market’s mood was.
“The housing market is still softening, but doing so at a slowing pace with signs of tentative confidence beginning to surface.
“With interest rates easing and more owner-occupiers re-entering the market, particularly in the middle and upper-middle brackets, we’re observing a return to activity in the main urban centres.”
He said first home buyers remained active along with growing investor activity, which was generating “subtle competitive pressures”.
But he said prices were being kept in check by high stock levels and vendor caution driven by issues such as tariffs and worries about holding on to jobs.
“While we don’t expect a dramatic winter upswing, it’s likely we’ll see growing buyer engagement as confidence continues to build,” Wilson said.
Regions better than cities
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As with the broader economy, regions were faring better than the main cities.
The best performing region was Northland with a 2.2% lift, while Whangarei had a 3.2% rise.
Other strong performers were Nelson, Christchurch and Invercargill – all gaining more than 1% in the three months ended May.
QV’s Nelson/Marlborough manager Craig Russell said first home buyers were active at the cheaper end of the market.
“A number of investors are selling properties which they’ve held as rentals for a number of years which is likely due to these investors wanting to free up capital, or obtain better returns elsewhere, after a period of no capital growth.”
However, Auckland and Wellington remained housing market laggards, falling 0.5% and 1.3% respectively.
Auckland valuer Hugh Robson said the overall market was subdued, but there were differences through the city with first-home buyers taking advantage low interest rates to chase properties in medium to lower districts.
Wellington was the worst performer in the report.
Senior consultant David Cornford said prices continued to go backwards and showed little inclination to spark.
“Despite interest rates now being significantly lower, these rate drops have not correlated to an increase in property values and it’s likely the region will require economic conditions to improve before we see a strengthening market.”
rnz.co.nz
