A "do-nothing" sentiment has gripped the property market where the number of house sales has dropped around a third from a year ago, according to the July report by QV.Property values have now dropped 0.8% since March, after rising 4.9% in the p
A "do-nothing" sentiment has gripped the property market where the number of house sales has dropped around a third from a year ago, according to the July report by QV.
Property values have now dropped 0.8% since March, after rising 4.9% in the prior eight months, QV said.
As a result, values are now 4.1% above the same time last year, and 4.7% below the market peak of late 2007.
A lack of buyer demand, combined with an increasing supply of unsold houses is causing values to gradually drop.
However, the average sales price increased slightly from $404,715 to $407,191 but this is because relatively few lower value properties are selling.
"The number of house sales in recent months has dropped around one third from the same time last year, and is also around one third below the long term average. We are now approaching similar levels of sales as during 2008 at the height of the recession," said QV.co.nz research director Jonno Ingerson.
An increasing number of people appear to be shelving plans to buy houses and are instead focusing on reducing debt. Of those potential buyers that remain active, some are finding it difficult to secure lending from banks, while others feel they are in the driving seat, have time to do their research, and only make sharp offers, said Mr Ingerson.
"Unlike 2008 when the overwhelming negative sentiment of the global economic crisis drove house values down, we are now seeing more of a 'do-nothing' sentiment."
Auckland area values are 6.9% above last year. A month ago they were up 7.9% above last year.
Recent declines in values in the Wellington area mean that values are now only 3.2% above last year, down from the 5.4% reported last month.
Values have been flat in recent months in Christchurch and are now 4.6% above last year. Dunedin values are now 3.7% above last year, down from the 5.8% reported last month.
In contrast to the other main centres, values in both Hamilton and Tauranga have been relatively stable for the last year. As a result Hamilton is only 0.3% above last year and Tauranga 0.5%.
Values in most of the provincial centres remain above the same time last year, although the gap is closing.
Napier (4.7%), New Plymouth (4.3), Wanganui (2.6%), Palmerston North (2.3) Nelson (3.1) and Invercargill (5.3) all remain above last year.
Rotorua (1.4%), Gisborne (0.6%) and Queenstown Lakes (-0.2) all have values similar to the same time last year.
Values in Whangarei have continued to drop since late 2009 and are now 2.6% below the same time last year.
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