Auckland values rise at fastest annual rate in 11 years

Auckland property values rise at fastest annual rate in 11 years

The latest monthly QV Residential Price Movement Index shows that nationwide residential property values for May have increased 9.0% over the past year and 3.1% over the past three months. This means they are now 24.1% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 8.9% and values are now 6.5% above the 2007 peak.

The Auckland market has increased 16.1% year on year, 5.4% over the past three months and 51.6% since 2007. When adjusted for inflation values are 16.0% over the past year and are 30.0% above the 2007 peak.

QV National Spokesperson Andrea Rush said, “The steepening line of the national index reflects value increases across all of New Zealand’s main centres over the past three months with the exception of Wellington which is showing a slight decrease.”

“National residential property values have risen at their fastest annual rate in 15 months and the Auckland market continues to drive this as it continues its meteoric rise with values in the Super City region rising at the fastest annual rate since mid-2004.”

“The usual winter downturn does not seem to have dampened demand as high net migration, relatively low interest rates and a constrained housing supply continue to fuel demand in the Auckland market.”

“This demand is also now spreading to provincial centres nearer to Auckland with values up in Tauranga, Hamilton, Cambridge, Pokeno and towns in the Hauraki District.”

“The annual rate of value increases in Christchurch is continuing to slow which is further evidence that the supply of repaired and newly built homes on the market is now starting to meet demand for homes there.”

“As yet there has been no obvious impact on the market from Reserve Bank’s proposed changes to deposit requirements for Auckland investment properties or the government’s re-classification to investment property taxes due to be brought in onOctober 1.”

Auckland

Home values across the Super City region have continued to soar over the past three months and Auckland City-South posted the highest annual increase with values rising a massive 20.2% year on year and 6.2% over the past three months alone.

Auckland City – East values were also up by 5.5% over the past three months and 18.2% year on year and Auckland City – Central values also rose 5.5% over the past three months and 12.9% year on year.

Waitakere City values also saw significant increases, up 6.4% over the past three months and 17.8% year on year. While Manukau-North West values rose 5.2% over the past three months and a whopping 19.2% year on year; Manukau-East values also increased 5.8% since March and 14.4% year on year; and Manukau-Central values rose 6.2% since March and 15.9% year on year.

On the North Shore, values in North Shore-Onewa had the greatest increase up 5.6% over the past three months and 17.5% year on year; North Shore-Coastal values increased 4.9% since March and 13.6% year on year; while North Shore–North Harbour values rose 6.2% over the past three months and 14.1% since May 2014.

Papakura District values also rose significantly as people look further out for affordable housing within the new developments there with values there up 6.6% since March and 17.4% year on year.

Rodney District home values also increased but at a slower rate than other areas of the Super City with home values in Rodney – Hibiscus Coast rising 2.2% since March and 7.9% year on year; and Rodney North home values up 3.6% over the past three months and 8.4% year on year.

QV homevalue Auckland Registered Valuer James Wilson said, “We have yet to experience the traditional ‘winter slowdown’ of sales prices or volumes and activity in the Auckland market remains strong.”

“There’s still a shortage of listings and the number of days properties are taking to sell remains low.”

“Auctions are continuing to produce good results, with high percentages of the properties exceeding expectations in terms of sales prices.”

“New builds remain extremely popular with strong demand to secure sections within new developments. The relative shortage of new sections coming onto the market within such developments has increased the popularity of existing housing resulting in strong capital growth.”

“Examples of the above are evident within the more established developments such as Stonefields where we have evidence of properties experiencing over 85% capital growth over a 5-6 year timeframe”.

“Demand for property with development potential is also strong, including large dwellings, traditionally not considered to offer viable subdivision potential now being purchased by developers who intend to demolish / remove existing improvements, sub divide and build.”

“Investors remain very active in the market, fuelled by low interest rates and strengthening prices; many are now opting to refinance and re- invest in capital upgrading across their portfolios, capitalising on historically low interest rates.”

Hamilton and Tauranga

Activity in the residential property market in Hamilton City has remained strong during autumn and home values have risen 1.4% over the past three months; 4.1% year on year and they are now 4.8% higher than the previous peak of 2007.

Taking a closer look, values in Hamilton-Central and North West increased 2.2% over the past three months; Hamilton-North East values rose 2.3%; Hamilton South-West values increased 1.5%; while Hamilton South East values decreased slightly by 0.2% over the same period.

Values in the Waipa District rose 1.0% over the past three months, 5.6% year on year and they are now 8.4% higher than the previous peak of 2007.

Values in the South Waikato also bucked a downward trend seen over recent months with values there rising 1.1% over the past three months and 0.8% year on year however they still remain 20.7% lower than they were in the previous peak of 2007.

Values in the Matamata-Piako District decreased slightly by 0.8% over the past three months but rose 5.4% year on year and they are now 2.6% below the previous market peak of 2007.

QV homevalue Hamilton Registered Valuer, Chris Price said, “The Hamilton market has been performing well and no winter slowdown in activity or interest has been seen yet.”

“There has been a lot of interest from Auckland investors in the Hamilton housing market and more properties are now being sold by negotiation or auction rather than with asking prices.”

“QV homevalue has seen an increase in requests for market valuations for reverse mortgages from retirees wanting to unlock the equity in their properties.”

“The rental market has been performing well with rents rising and a large number of rental properties also being sold.”

“The median sales price in Hamilton is now $379,000 so it’s possible this could reach the $400,000 mark sometime this year if values continue to rise at a similar rate and if current demand/supply conditions continue.”

“Values in the Waipa District have continued to see significant growth driven mostly by demand for property in Cambridge which has seen increased values over the past 12 months.”

Home values in Tauranga City have risen by 4.1% over the past three months; 6.7% year on year and they are now just 0.2% below the previous peak of 2007.

Values in the Western Bay of Plenty decreased by 0.5% over the past three months but rose 1.7% year on year, and they are now 5.7% below the previous peak of 2007.

QV homevalue Tauranga Registered Valuer Jessica Videbeck said, “The market continues to see strong interest and activity from out of town buyers and there’s been little to no sign of the traditional winter slow down often seen during the cooler months.”

“There are still high numbers of Aucklander’s attending opens homes as a continuing flow of people look to move to Tauranga to take advantage of the more affordable homes or to look for investment property.”

“In the Western Bay of Plenty demand remains high for residential property in Omokoroa and there is also good demand and activity for homes in Te Puke and Paengaroa, particularly for those looking for a more affordable entry into the housing market.”

“There’s also been an increase in interest for lifestyle properties in Te Puna which is becoming more popular due to the area’s relatively close proximity to Tauranga’s city centre.

Wellington

Home values in the Wellington region continue to be varied with some areas showing some steady increases while other areas remain flat or slightly down over the past three months.

Wellington–West values have risen the most up 1.8% over the past three months, 2.6% year on year and they are now 3.5% over the previous peak of 2007; Wellington–East values were down slightly by 0.2% over the past three months but increased 2.8% year on year and are now 2.5% higher than they were in the previous peak; Wellington Central and South values were also down slightly by 0.5% over the past three months but rose 1.3% year on year; while Wellington–Central and South values were also down by 0.5% over the past three months but rose 1.3% year on year.

Home values in Lower Hutt rose 0.5% over the past three months but were down slightly by 0.1% year on year; Upper Hutt also rose by 0.4% over the past three months and 1.5% in the year since May 2014; while Porirua City was also up 1.1% since March and 2.3% year on year.

QV homevalue Wellington Registered Valuer Kerry Buckeridge said, “Some areas of Wellington City are starting to see a rise in values and while others remain steady.”

“However activity levels are good and the feeling on the ground is that the market has been improving over the past few months.”

“We are seeing multiple offers on ‘the right property in the right location with the right marketing’ in some parts of Wellington Central and city fringe suburbs with some strong selling prices being achieved.”

“Wellington’s westerns suburbs are in demand with values on the rise and the average value there has now is now $628,804.”

“First home buyers have been active in Porirua as the high cost of homes closer to the city centre excluding most first home buyers, particularly now they need a 20% deposit.”

“Investors remain active in the Wellington market and the strong demand for rental properties and the relatively high rents means very good yields of 7.0% and above can be achieved.”

Christchurch and Dunedin

Home values in Christchurch City overall increased 0.3% over the past three months, 3.8% year on year and they are now 25.0% higher than in the previous peak of 2007.

Taking a close look: Christchurch-Hills values rose the most up 3.2% over the past three months, 3.6% year on year and they are now 17.3% higher than in 2007; Christchurch East values rose 0.5% since March and 3.4% year on year; Christchurch-Central and North rose slightly by 0.2% over the past three months, 3.9% year on year; while Christchurch-Southwest values were down slightly by 0.4% over the past three months but up 3.8% year on year.

Residential property values in the Selywn District continue to rise up by 0.9% since March, 5.1% year on year; while values in the Waimakariri District were flat rising just 0.1% since March, however they rose 2.7% year on year.

QV Christchurch Registered Valuer Daryl Taggart said, “Over the past year we have seen a slowing in the annual rate of increase in home values in Christchurch City.”

“Home values in Christchurch rose 3.8% in the year to May 2015; this compares to 7.4% in the year to May 2014; 10.0% in the year to May 2013 and 5.4% in the year to May 2012.”

“This decreasing trend in the annual rate of growth is further evidence that the market is flattening out over time as supply meets demand across city with more homes being repaired and many new homes having been constructed and on the market.”

“The market however continues to show plenty of activity and good prices are being achieved at auctions for desirable properties in sought after locations.”

“Christchurch Hills is showing the highest rate of value increases over the past three months and this is likely to be driven by a catch up in the market following a lull in sales there after the earthquakes as buyers were hesitant to buy there due to the extent of damage in the area.”

“Now that many ‘Hills’ homes have been extensively repaired and more homes are available for sale in the area, home values are now rising and good prices are being achieved.”
Values in Dunedin City as a whole were up 0.4% over the past three months, 1.2% year on year and they are now 2.5% above the previous peak of 2007.

Taking a closer look, Dunedin-Peninsula and Coastal home values rose by 1.5% over the past three months and 2.0% year on year; while Dunedin-Central and North home values were just 0.1% higher than in March but rose 1.8% year on year; Dunedin-Taieri values rose by 0.7% over the past three months and 1.9% year on year; while Dunedin-South values were up 0.5% over the past three months but decreased by 0.5% year on year.

QV homevalue Dunedin Registered Valuer Duncan Jack said, “Values in Dunedin continue to move along steadily.”

“The traditional winter slow-down appears to have commenced, which is evident due to there being less activity from vendors who tend to not want to sell their homes at this colder time of the year.”

“However there is still good demand from buyers across the value ranges and particularly in the lower end of the market. The drop in activity is likely to be stifling growth to a degree but perhaps offset by the continuing buyer demand.”

“Mosgiel continues to be a popular location for new builds and development with the majority of the buyers likely to be second or third time buyers purchasing larger new homes in the higher price brackets.”

Provincial centres

Residential property values in many of the provincial centres in close proximity to Auckland are experiencing a rise in value as Aucklanders look to other centres to find more affordable homes.
For example residential property values in the Hauraki District have risen 3.0% over the past three months and 6.1% year on year, while values in the Franklin District are up 4.9% since March and 9.6% year on year.

In other North Island provincial towns it’s a mixed bag with some areas flat, others showing value decreases and others up in value. Rotorua District saw values rise 1.8% over the past three months, while values in Palmerston North were flat and values in Gisborne continued the downward trend seen for some time, decreasing 1.2% over the past three months.

In the South Island, most places saw an increase in value over the past three months with a few exceptions including the Kaikoura District down slightly by 0.7% over the past three months; Invercargill City also down just slightly by 0.4%, the Grey District down 1.9% over the same period.

ENDS

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