Property values up, shortage of supply 

Source: ONE NewsHousing market - house for sale

For the first time in 16 months residential property values are higher than they were a year earlier, QV figures show.

A continued shortage of properties for sale is thought to be continuing to push up prices being paid.

According to data published on Monday, property values in October were 0.2% higher than the same time last year, compared with the 1.1% decline from a year earlier recorded in September.

QV statistics last showed a rise on year ago levels in June 2008, when the annual growth was just 0.1%.

Nationwide values were now 3.4% above their low in April, but remained 6.6% below the market peak of late 2007, QV said.

Last month the average sale price for New Zealand was $389,198, up from $387,567 in September.

QV Valuation manager Glenda Whitehead said market activity remained below normal spring levels.

Sales numbers had remained relatively static in the past few months, and there was little evidence of a rise in new listings in most areas, she said.

"The continued shortage of properties, especially in the main urban areas, is leading to a continued imbalance in the market with more buyers than available properties.

"As a result our valuers are seeing many properties sell for well above their expected values. These demand-based price increases are likely to continue until the balance in the market changes," Whitehead said.

Several factors could account for the lack of strong spring activity.

Many owners would have locked in lower long term interest rates at the start of the year and would be concerned about losing those rates if they sold, she said.

Needing to buy again in a market which had a shortage of available properties for sale would also be putting some people off.

Most main centres now had values above the same time last year, while most provincial centres had not risen as much in recent months.

Auckland area values were up 2.5% on a year ago, in the Wellington area the rise was 1.6%, Christchurch was up 1.3%, Dunedin up 4.3%, Hamilton was 0.1% below, and Tauranga down 1.4%.