New Zealand property prices are increasing, but at a slower rate than towards the end of 2009. Across the two islands, there are plenty of bargains for the shrewd property investor. Presently, there are fewer buyers in the market as people are waiting for the government to announce tax reforms in May, so vendors are reducing prices again to attract the buyers. Investors can take advantage of the low interest rates too, with the official cash rate remaining at 2.5%. Following is a region-by-region summary of property values in the past month.

Auckland
Although the average sale price for the Auckland region remained stable at $548,948, property values actually increased by 8.7% as a rolling three month comparison with 2009 figures. This compares favourably to the 7.3% recorded for January 2010. QV Valuations representative, Glenda Whitehead, said there were mixed messages from the market, with properties in some suburbs selling better than in other suburbs.

“Within West Auckland, the market appears to be ticking over steadily. There are still a few investors around, looking for good buys,” Ms Whitehead said. “In the Eastern Manukau suburbs of Pakuranga and Bucklands Beach through to Howick, market activity continues with stable prices and a feeling of consolidation.”

Christchurch
According to figures from QV Valuations, property values in Christchurch rose by 6.9% when calculated on a three-month average for December, January and February, compared to the same period in 2009. Vendors are receiving a little more for the properties, with the average sale price increasing marginally to $380,925.

QV Valuations representative, Melanie Swallow, said the south western suburbs were showing the greatest growth, up 8.7% compared to the same time last year. However, she said that the eastern suburbs had a small decrease of -0.4%. More people were looking to buy entry-level properties in the southwest, central, and northern suburbs. “The number of listings for sale is on the rise and signs of a more traditional market are emerging,” she said.

Dunedin
Property values continue to rise and are showing an increase of 6.2% over the past year compared to the 5.0% annual growth figure reported in January. Interestingly, the average sale price in February increased over $6000, to $285,787 from $279,101. QV Valuations representative, Tim Gibson, said the growth in Dunedin’s residential market was evident in all areas in the region. Since the values are still 3% below the market peak of July 2007, investors can pick up some great bargains in Dunedin presently.

Mr Gibson said that property listings for the month of February increased significantly, compared to the volumes in December and January. “This may be due to more investors selling-out before the government budget is announced in May, when taxation details are due to be confirmed.”

Hamilton
The top end of the market is growing faster than other residential properties in Hamilton, which experienced an overall average growth of 4.3% in the past year. The average sale price increased over $10,000 to $361,394. QV Valuations representative, Richard Allen, said the price increase was the result of activity in the top-end of the market rather than a general increase in value levels. “In particular, there has been heightened activity in the north east of the city, as well as in some of the other areas where property is traditionally more expensive,” he said.

Tauranga
Growth is slower in Tauranga where property values increased by 1.0% over the past year. The average sale price for the region is slightly higher at $422,746. QV Valuations representative, Shayne Donovan-Grammer, said Tauranga’s property market was moving forward cautiously. “Owner-occupier buyers are active, but still looking for sharp prices and in many cases vendors are happy to oblige in order to alleviate their financial burden.”

Mr Donovan-Grammer said many developers were offering house and land package deals. “With existing properties, the $250,000 to $300,000 bracket is fairing best, while homes in new subdivisions under or around $400,000 are creating the most interest,” he said. With a lack of investors, the entry-level properties of $220,000 or less are not selling well, so it could be an ideal way to enter the property investment market.

Wellington
The average sale price in Wellington increased $8,000 to $468,698 and the annual growth rate for property values has increased by 6.7% over the past year. This is a 1.0% increase on the annual growth rate reported in January. QV Valuations representative, Kerry Buckeridge, said that most real estate agents were reporting more new property listings. “Interestingly, lower-end properties in the city area are selling very quickly, along with properties at the very top-end of the market,” she said.

Property investors who buck the trend to wait until the government announces the tax reforms in May could find the risk pays off with the increase in property listings throughout New Zealand showing that vendors will be likely to reduce prices to finalise a sale. It could be the right time to pick up a bargain in the property market, which will increase in value in the long-term.