The rate of fall in home prices in New Zealand has slowed down. In this case, active buyers in the housing market remains weak, which, according to some analysts, could lead to oversupply of new deals and lower prices.
According to consulting company QV Valuations, the gap between current and last year`s price had fallen to 0.3%, but prices are still at 5.6% below the market peak reached in 2007, reports Property Wire.
Recall what was the price dynamics in the real estate market of New Zealand in recent years. As a result of an 18-month crisis fall in early 2009, prices have dropped so much that stimulate demand for residential property. As a result, since September 2009, prices went up. Their growth was continued until March 2010, then began a gradual decline, which, according to the latest QV Valuations, now slowed.
Thus, the price of a national real estate market is gradually stabilizing. In particular, the country`s largest city Auckland in recent months prices "hold" on the same level - a fact, analysts said QV Valuations, determines the stabilization of the market.
The present level of prices in Auckland on 1,8% more than last year`s figures for the same period. At the same time, in the metropolitan area of Wellington, where the fall in prices was most noticeable price indices today, by 1,6% lower than a year ago. However, even here in the past month, analysts saw signs of stabilization.
In this case, the activity of buyers remains unusually low for this time of year. In some regions, for this is a specific reason. In particular, after the September earthquake in Canterbury, the process of making deals with residential real estate will be difficult, which led to a drop in sales.
In addition, according to Yono Ingerson, director of analytical department of QV Valuations, in recent months the market has increased the number of real estate. With the current low demand, stocks of unsold real estate will only increase, which is fraught with another price drop or "stagnation" of the construction industry of the country.