Residential Property Values up 14.2%

Media release
10 July 2005

Residential Property Values up 14.2%

The residential property market has shown little signs of slowing, with residential properties increasing in value by 14.2% for the year ended June, up from 13.5% annual growth to May.

“Despite thoughts that the property market is about to enter a slowdown period, we are still seeing increasing levels of growth in property values across most areas of the country, with only Nelson (-1.3%) experiencing a decline in property values”, says QV’s Blue Hancock.

Residential property values in Hamilton City grew by 23.6%, the most of any main centres, followed closely by Dunedin (22.1%) and Christchurch (18.5%). Wellington residential properties grew in value by 8.9%, while Auckland City properties grew 5.7% on the back of strong growth of 8.8% in the eastern suburbs.

Further evidence of the current buoyancy in the market is reflected in the turnaround in Queenstown and Tasman property value growth. Queenstown residential properties grew 8.9%, a substantial improvement from figures reported earlier in the year which had property values in the area growing at less than 2% annually, while residential property in Tasman grew 2.4%, “encouraging given that earlier in the year property values in Tasman were declining by as much as 5%” Mr Hancock said.

“Although property values remain buoyant, all the indicators are pointing to a levelling out of growth in values rather than a continued increase on the current level of growth we are seeing in the market”, Mr Hancock said.

Residential Price Movement
Questions and Answers:

The following information is provided as background to the Residential Price Movement statistics.

1. What is the Residential Price Movement Report?

The Residential Price Movement Report is a new set of residential property statistics that provides an estimate of the change in residential property values over the previous 12 months for areas throughout New Zealand. Residential sales compiled by QV for the previous 3 months are compared to the same period of the previous year to identify the annual percentage change in residential property values. The residential sales included are for residential houses, apartments, flats, home and income properties, and houses converted to flats.

2. Why has the Residential Price Movement Report been developed?

The Residential Price Movement Report has been developed to provide a timely indicator of residential property value movement, using the latest residential sales data compiled by QV for the previous 3 month period.

QV has previously only released property statistics quarterly. QV’s measure of price movement has been the Quarterly House Price Index (QHPI). The QHPI only includes sales that have been notified to the Territorial Authority that sold within the quarter. As sales of properties can sometimes take 4-6 weeks to settle, the QHPI is released after an extended period to incorporate as much sales activity from the quarter, which results in increased statistical accuracy, but also a less timely output.

As the Residential Price Movement Report uses the sales compiled by QV over a 3 month period, rather than the sales that necessarily sold within that period, the Residential Price Movement Report can be released on a more frequent basis, providing a timelier indicator of property value movement. The Residential Price Movement Report also includes sales activity in other residential property sectors including apartments and flats.

3. How frequently will the Residential Price Movement Report be released?

The Residential Price Movement Report data will be available to the media on a monthly basis. It will be released to the media for publication on either the second or third Monday of each month.

4. How current is the Residential Price Movement data?

The data contained in the Residential Price Movement Report is based on the residential sales compiled by QV for the previous 3 month period.

For example, the Residential Price Movement Report as at January 2005 will include sales compiled by QV up until 31 January 2005 and include sales compiled since 1 November 2004.

5. Why does the Residential Price Movement Report include sales compiled by QV over a 3 month period?

Sales are included over a 3 month period rather than a single month to ensure that there are sufficient sales volumes to calculate statistically accurate property value growth.

6. How is the Residential Price Movement data calculated?

The Residential Price Movement Report includes two indicators of property value; the property value growth, and average sales prices.

Property Value Growth
The Property Value Growth uses QV’s House Price Index methodology, which generates a residential index for each area by recognising the sales price of each property sold compared to its capital value. This ensures the index provides a measure of change in property values, without fluctuations caused by higher sales volumes in one or more property sectors (e.g. high volumes of apartment sales or investment properties).

Residential sales compiled by QV for the previous 3 month period are compared to the sales compiled by QV for the same period the previous year to identify the annual percentage change in property values.

Average Sales Prices
The Average Sales Prices calculated in the Residential Price Movement Report are based on residential sales compiled by QV for the previous 3 month period.

7. Does property value growth reflect a change in average sales prices?

No. Property Value Growth does not reflect a change in average sales prices, which are only given to enable a comparison of sale prices for one month compared to the last. Property Value Growth uses QV’s House Price Index methodology to generate a residential index for each area by recognising the sales price of each property sold compared to its capital value.

8. Why does QV recommend using the Property Value Growth rather than Average Sales Prices to verify the change in property values over time?

Average Sales Prices are only provided in the Residential Price Movement Report as a broad indicator of property values in an area to assist comparisons between areas. QV recommends referring to the property value growth to verify change in property values over time, rather than the average sales price, as the average sales prices can be impacted by the types and categories of properties selling, or low volumes of property sales.

9. When was the Residential Price Movement Report first released?

The Residential Price Movement Report was first released for the period ending January 31 2005. The QV Quarterly House Price Index, which measures the movement of house values over time, is available back until 1989. QV is also able to produce statistics using its database going back to 1985 for most areas.

10. Why does the Residential Price Movement Report provide an ‘estimate of property value’ only?

Data in the Residential Price Movement Report provides estimates only of property value, and should not be considered ‘final’ statistics, as not all sales for the 3 month period will be included due to the time the data is released. This is because some sales within the 3 month period will not have been notified to the Territorial Authority in time for inclusion in the Residential Price Movement Report data. Notification of the sale to the Territorial Authority does not occur until after the sale has been settled and documents forwarded by the solicitor. This generally introduces a lag of 4 to 6 weeks before the Territorial Authority records the sale.

QV produces final property statistics which are released after an extended period to incorporate a greater level of sales activity, resulting in a more statistically accurate output. Final property statistics, including the QV Quarterly House Price Index, can be purchased online at www.qv.co.nz.

11. Why do some Territorial Authorities show ‘N/A’ (Not Available)?

Territorial authorities may show ‘N/A’ if there is insufficient data available at the time of publication to produce statistically accurate outputs. This may occur when there has been very low sales activity in an area, or alternatively when QV has not been supplied sufficient residential sales volumes by a Territorial Authority for a particular period.

12. Why does QV caution against using statistics with low volumes of sales?

Statistics based on low sales volumes should be used with caution, as low volumes of sales are insufficient to create statistically accurate outputs. Any statistics calculated based on sales volumes of less than 50 sales appear in Italics in the Residential Price Movement Report data.

13. How are the regions and city areas defined?

Property Value Growth statistics are provided for each council area throughout New Zealand. Five main urban areas (Auckland, Hamilton, Wellington, Christchurch, and Dunedin) also have property value growth statistics available for areas within the cities. These city areas have been defined through consultation with QV Valuers that have local knowledge of each area.

Property Value Growth Statistics are not provided for individual suburbs, as most suburbs have insufficient sales volumes to ensure statistically accurate property value growth calculations.

14. Where does QV source the property data?

QV maintains a national database on Property Information that it creates by sourcing updates of the District Valuation Roll from all NZ Territorial Local Authorities/councils.

QV RESIDENTIAL PRICE MOVEMENT REPORT - as at June 2005

City / Region June 2005 Property Value Growth % May 2005 Property Value Growth % June 2005 Average sale price
(Annual % change) (Annual % change)
Far North 34.8 32.7 $289,935
Whangarei 23.9 22.6 $261,672
Kaipara 24.1 20.9 $215,596
Rodney 13.2 14.1 $408,173
- Hibiscus Coast 12.6 11.9 $416,032
- Rodney (North) 14.5 17.5 $396,235
North Shore City (A) # 9.4 8.6 $475,264
- Coastal North Shore 9.9 8.9 $560,044
- North Shore Onewa 9.6 8.9 $373,649
- North Harbour 8.7 7.5 $479,568
Waitakere City (A) # 11.5 11.9 $332,671
Auckland City (A) # 5.7 5.8 $481,634
- Auckland City (Central) 0.2 1.1 $460,894
- Auckland City (East) 8.8 8.7 $602,201
- Auckland City (South) 6.9 5.9 $413,358
- Islands 5.2 1.4 $490,798
Manukau City (A) # 9.7 9.1 $338,381
- Manukau East 5.1 4.3 $431,061
- Manukau Central 15.5 15.8 $269,351
- Manukau North West 13 12.8 $285,152
Papakura (A) # 14.5 15.8 $274,250
Franklin 20 23.3 $288,196
Thames Coromandel 18.7 19.5 $412,341
Hauraki 36.3 37.3 $173,927
Waikato 25.7 23 $194,204
Matamata Piako 31.7 23.7 $205,288
Hamilton # 23.6 21.2 $266,962
- Hamilton North East 22.2 19.5 $341,545
- Central City/North West 25 23 $250,424
- Hamilton South East 23.3 21.2 $249,963
- Hamilton South West 24.7 22.7 $245,371
Waipa 24.3 24 $241,558
Otorohanga 49.7 43.2 $150,279
South Waikato 36.3 32.8 $90,829
Waitomo 26.4 22 $115,556
Taupo 15.2 14 $310,925
Western Bay of Plenty 19.1 21.8 $336,558
Tauranga # 16.5 15.8 $377,376
Rotorua 17.4 16.3 $196,429
Whakatane 45 40.6 $274,642
Kawerau 37.6 34.5 $93,915
Opotiki 62 68.4 $173,162
Gisborne 28.8 29 $189,865
Wairoa 22.7 20.2 $110,151
Hastings 19.2 21.3 $266,837
Napier City # 13.6 14.8 $308,344
Central Hawkes Bay 19.4 20.9 $168,838
New Plymouth 34.9 33.4 $276,869
Stratford 52.1 55.5 $129,231
South Taranaki 39.1 35.3 $126,304
Ruapehu 23.2 26.2 $105,007
Wanganui 39.6 38.8 $143,389
Rangitikei 34.9 39 $98,221
Manawatu 19.8 22.7 $172,269
Palmerston North # 18.6 18.1 $219,717
Tararua 20.6 18.2 $102,170
Horowhenua 18.3 21 $147,638
Kapiti Coast 12.1 12.6 $261,749
Porirua (W) # 15.1 15 $294,852
Upper Hutt (W) # 12.3 11.2 $241,817
Lower Hutt (W) # 13.4 13.7 $266,994
Wellington City (W) # 8.9 8.2 $404,040
- Wellington City & Southern Suburbs 6.9 5.9 $390,907
- Eastern Suburbs 9.5 8.2 $442,354
- North Wellington 10.5 10.4 $378,663
- Western Suburbs 9.3 8.6 $458,523
Masterton 11.4 12.5 $181,359
Carterton 7.1 11.5 $180,902
South Wairarapa 16.6 16.8 $209,423
Tasman 2.4 -0.9 $342,736
Nelson # -1.3 -2 $323,671
Marlborough 7.3 7.1 $269,514
Kaikoura 20.6 21.7 $342,184
Buller 43.8 40.9 $124,576
Grey 27.3 27 $153,993
Westland 30.9 29.5 $149,323
Hurunui 33.3 35.6 $238,035
Waimakariri 22.3 23.4 $257,752
Christchurch City # 18.5 18.5 $287,220
- East 20.7 21.6 $240,208
- Hills 16.3 14.5 $412,507
- Central City and North 16 16.5 $333,007
- Southwest 20 19.6 $268,610
Banks Peninsula 16.9 22.8 $334,935
Selwyn 34.7 33.8 $294,007
Ashburton 18.1 16 $181,084
Timaru 24.9 26.7 $176,101
MacKenzie 21.6 15.4 $183,290
Waimate 16.2 29.8 $120,257
Waitaki 15.2 12.8 $166,315
Central Otago 14.5 15.7 $277,747
Queenstown Lakes 8.9 7.2 $516,775
Dunedin # 22.1 22.9 $228,756
- Central/Northern City 23 21.3 $241,937
- Peninsular/Coastal Dunedin 32.2 39.3 $216,795
- Southern City 20 22 $208,665
- Taieri 18.7 20.4 $239,523
Clutha 19.4 28.4 $140,359
Southland 18.2 19.9 $147,010
Gore 14.5 15.2 $106,434
Invercargill # 7.9 8.3 $136,565

Total NZ 14.2 13.5 $306,200

Auckland Region (A) 8 7.8 $412,098
Wellington Region (W) 10.9 10.4 $333,090
Main Urban Areas # 11.3 10.9 $345,308

If a City or Region is shown in italics with an * this indicates the values for this area may not be statistically accurate as they are based on a low volume of sales N/A - indicates that either there were too few sales to report a Property Value Growth % or that the data for this period was unavailable

The information included in the above table is calculated based on the sales data entered into QV's system for the previous 3 month period. For example, information for the period ending June will be calculated based on sales entered between April 1 and June 30.

Property Value Growth is the annual % change in residential property values, calculated using QV's House Price Index methodology. The residential sales entered into QV's system for the previous 3 month period are compared to the same period of the previous year to identify the annual percentage change in residential property values. Average sale prices are calculated based on residential sales entered into QV's system for the previous 3 month period.

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