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Source: ONE News -
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The latest quotable value (QV) statistics show property values fell by 7.4% during 2008.
Property values for all the main centres declined, as did provincial values.
QV Valuations says last year was the first time in 10 years that the market showed a sustained drop in values.
"Property values held reasonably flat through the first three months of the year, but the decline kicked in through the autumn and winter months, during which time values dropped 6%," says QV Valuations spokesperson Mark Dow.
Dow says it is inevitable property values will drop after a period of sustained growth such as that experienced between 2000 and mid 2007 when values increased 120%.
"The question remains how long this period of falling property values will continue," he says.
Dow says it interesting to consider the different stages of the property cycle. Between 2000 and 2003 the number of house sales more than doubled, with a dramatic increase in the proportion of lower value property selling.
Between 2004 to 2007, the number of house sales remained fairly steady, as did the proportion of low, medium and high value sales.
During 2008, the number of house sales fell dramatically and the proportion of lower value properties selling significantly decreased.
Dow says when the economy is strong, job prospects are good, immigration increases, and demand for houses - particularly first homes - pushes prices up.
As the economy weakens and affordability becomes an issue, first home buyers are usually the first to suffer, resulting in lower sales volumes and activity in the market moves back to mid to higher end properties.
Dow says that drops in interest rates over the past three months
has help stimulate activity and the market may flatten again.
