Softening housing market cuts profits
5:00AM Monday April 14, 2008
By Craig Borley

Homeowners are still making a profit selling their homes, according to the latest figures from Quotable Value.

But that profit is shrinking, and the figures for the three months to March 31 add to the growing evidence that New Zealand's residential property market is struggling.

The 6.5 per cent growth in national property values over the past year is down on the 7.7 per cent growth reported in February.

The average New Zealand sale price also decreased to $388,894 from $393,240 last month.

Quotable Value spokesman Blue Hancock said the market was continuing to soften, and the negative market sentiment would likely continue into the winter months.

But while more listings and fewer buyers had led to reduced demand, and some properties or localities were selling below previous expectations, other areas were doing far better.

Waitaki, in North Otago, has seen property value growth increase from 9.5 per cent last month to 12.9 per cent.

Kaipara growth increased from 6.1 per cent to 7.9 per cent, while Queenstown Lakes growth increased from 5.2 per cent to 6.2 per cent.

Auckland City east is the country's highest-priced area, with a March average sale price of $756,445. Coastal North Shore ($698,88 and North Harbour ($628,732) were the country's second and third highest-priced areas.

The South Island's highest priced area was Queenstown Lakes, with an average price of $572,361. Queenstown's growth had risen from 5.2 per cent the previous month to 6.2 per cent. Of the main urban areas, Dunedin and Hamilton were slow-ing the fastest, with growth rates easing to 2.2 per cent and 3.4 per cent respectively.

Auckland City growth had dropped from 7.2 per cent to 6.2 per cent, Wellington City from 9.2 per cent to 7.4 per cent and Christchurch from 6.1 per cent to 5.8 per cent.

Tauranga was the only main centre to increase property value growth, rising from 2.9 per cent to 3.7 per cent.

Mr Hancock said the figures reflected more activity at the bottom end of the market and less at the top, rather than any large drop in value.

Many investors were seeking to reduce their exposure to increasing mortgage costs, and having made good capital gains over the last few years, were now looking to sell.


March sale price
Five most expensive areas (figures provided by Quotable Value)

1 Auckland City east $756,445
2 North Shore coastal $698,888
3 North Harbour $628,732
4 Auckland islands $618,355
5 Wellington east suburbs $592,714

5 least expensive areas

1 Tararua $158,327
2 South Waikato $159,927
3 Gore $165,399
4 Kawerau $166,633
5 Waimate $167,569
Oh gee watch the rush to the South Waikato by investors buying affordable rentals.