Property prices in New Zealand property fell for the first time in 14 months in May, reflecting a general lack of confidence among buyers faced with more choice, according to the latest real estate index.
Property values in May were 5.6% higher than in the same month of 2009, retreating from the year-on-year gain of 6.1% in April. It is the first time since March 2009 that the increase has lagged that of the previous month.
The figures from QV show that prices are now 4.1% below their peak towards the end of 2007 peak. The national average sales price for the three months to May fell to $403,070 from $403,070 from $405,235 in April.
In Auckland, property values rose 8.8% from the same month of 2009, down from a 9.5% increase in April. The average sale price rose to $534,639 from $532,538 in April.
Values in Hamilton were 1.7% up on last year, down from a 2.7% gain in April. The average price fell to $350,722 from $357,200.
In Tauranga, the increase abated to 0.4% from 0.6% while the price slipped to $409,376 from $412,080. Wellington’s values rose 6%, down from 7.1% and the average sale price fell to $454,625 from $460,365.
While in Christchurch, values rose 6.2% in the three months through May, from the same period last year, down from the 6.9% a month earlier. The average sale price fell to $359,597 from $367,688.
In Dunedin, the annual increase was 4.8%, down from a 7.5% increase in April. The average sale price in Dunedin fell to $269,848 from $275,142.
According to QV research director Jonno Ingerson there is some evidence this year that property investors have held off until they saw the detail of last month’s Budget and the changes to the tax treatment of investment properties. ‘With the various tax changes still some time away, any effects are likely to take some time to flow into the market. We expect that sales volumes will remain static over winter,’ he said.
Ingerson added that he expects changes to tax on properties are unlikely to cause an across the board weakening in prices, though lack of buyer confidence will weigh on the market in the short term.