A Time for Serious New Year Resolution

Twelve months ago we were rejoicing the passing of 2010 and looking forward to a better 2011. Little did we know that the events of 2010 were just the forerunner to the disastrous events that unfolded during the next year.Hence even greater determination this year that things can only get better and get better they will.

Mercifully the South Island has enjoyed great weather over the holiday break and we are so lucky to have so many utopian holiday spots all around the island and all so close. They have been wonderful in giving our community space between what was and what lies ahead. I salute those who have toiled throughout this period working towards the remediation and restoration of our great city. The volume of work achieved thus far is staggering - there will be phenomenal industry in Christchurch this year. It has been well heralded how beneficial ths will be for our local community and naturally this will extend to the real estate market. Demand is extremely strong currently - from those displaced, those arriving into the city and just the normal sources of housing demand.

We are anticipating a very busy year ahead. If you are contemplating selling in the next while I would be happy to sit and discuss your plans and options with you. If buying a new home is part of your 2012 plan may I recommend my very experienced and helpful buyer's assistants Pauline & Sarah.

We are looking forward to helping you in the interested year that lies ahead. In the meantime stay staunch and be resolute.

Regards,

Ally

Best wishes for 2012, I thought you might find this comprehensive market report on the 2011 Residential Property Market from QV informative.

The QV price indices for December show that New Zealand residential property values continued to gradually increase, rising 2.4% over the past twelve months. Nationwide values are now 3.5% below the previous market peak of late 2007.

New Zealand property values in 2011

For the first few months of 2011 values across New Zealand were stable with rising values in Auckland and Christchurch being balanced by falling values in many other areas. From April onwards national values began to increase as most of the main centres, apart from Wellington, began to stabilise. By September values were increasing in all the main centres, including Wellington, as well as in many of the provincial and rural towns, suggesting a nationwide improvement in the property market.

The year ended with the first signs that this apparently nationwide recovery may be faltering. National values increased from November to December, as they continued to do in Auckland, Wellington, Christchurch and Dunedin. However values flattened in Hamilton and Tauranga, and dropped in several provincial towns that previously had been recovering, notably Gisborne and Rotorua.

Christchurch

The Christchurch property market is still significantly disrupted as a result of the earthquakes. Values in the undamaged parts of the city have increased due to demand from displaced residents or workers from outside the region assisting with the recovery. Values overall in Christchurch City ended the year 4.3% up and just 0.9% below the 2007 market peak. The areas immediately surrounding Christchurch have picked up strongly with Waimakariri District 9.1% up over the year and 2.6% above the 2007 peak, and Selwyn District 7.5% up over the year and 5.0% above the 2007 peak

Low sales volumes in 2011

Despite national values moving upwards during the year, the property market continued to be characterised by lower than normal sales volumes. Sales numbers in 2011 were more than 20% below the long term average, and while up a few percent on the sales volumes of 2008 and 2010, both of those years were the lowest since the early 1980’s, so outside of those two years 2011 is the lowest for 20 years.

Buyer behaviour

Buyers were generally acting cautiously throughout the year, taking their time to do their research before making offers. First home buyers came back into the market in 2011 encouraged by low interest rates, while investors were largely on the sidelines.

This increase in activity at the lower end of the market was reflected in the average sales price of $398,411 for properties sold in the last three months of the year. This was nearly $12,000 less than the average sales price a year earlier, a drop of nearly 3%. This change in sales price is in contrast to the QV index, which is not based on average sales prices, which rose over 4% over the same period. The QV index is a better reflection of the change in market value, not just the value of those properties that happened to sell.

2012 outlook

The property market is heavily influenced by consumer confidence, so it will be fascinating to see how 2012 pans out. Auckland values are likely to increase further, especially given that the population continues to grow, building activity has been weak, and if a lack of new listings of quality properties keeps supply below demand.

Whether values continue to increase in Christchurch depends on a number of factors including the re-zoning of properties to red or green, decisions on the nature and timing of CBD redevelopment, and of course any further significant earthquake events.

Values in Hamilton, Tauranga are likely to stay fairly stable, and whether values continue to rise in Wellington and Dunedin is difficult to pick.

The property markets in the provincial and rural areas are heavily dependent on the strength of the local economies in those areas. A strong rural sector typically has a positive impact on the property values in towns supporting those areas, likewise the coming or going of large local industries can have a significant impact.

While business and consumer confidence seems to be on the increase, there is still some concern about the financial situation in Europe, and what may happen to the New Zealand economy if events there take a turn for the worse. 2012 is likely to be another interesting year for the property market.