"Auckland effect" leading to rises in Tauranga, Hamilton

QV figures show "Auckland effect" leading to value rises in Tauranga and Hamilton

The latest monthly QV House Price Index shows that nationwide residential property values for June have increased 9.3% over the past year and 3.6% over the past three months. This means they are now 25.6% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 9.2% and values are now 7.8% above the 2007 peak.

The Auckland market has increased 17.0% year on year, 5.5% over the past three months and 53.7% since 2007. When adjusted for inflation values are 16.9% over the past year and are 31.9% above the 2007 peak.

QV National Spokesperson Andrea Rush said, “Large numbers of Aucklanders are flocking to buy property in Tauranga, Hamilton and the Western Bay of Plenty resulting in rising values in these areas.”

“There are reports that of those present at open homes in Tauranga, as many as 60% are regularly from Auckland, while around 15% of all buyers in the Hamilton market are now from Auckland.”

“Values in the other mains centres including Wellington, Christchurch and Dunedin continue to rise at a slower, steady rate.”

“There is a severe shortage of properties listed for sale across all of the main centres and this winter slowdown is dampening activity in some areas while in other areas the lack of listings is leading to increased competition amongst buyers which is driving values up.”

“Sales volumes are higher than this time last year with high migration and the forecast of lower interest rates fuelling increased levels of activity in the housing market in many parts of the country.”

“It appears the prospect of changes to the LVR deposits and tax of residential investment property may be creating some urgency amongst buyers wanting to purchase before the changes come into effect on October 1.”

Auckland

The QV House Price Index average value for Auckland City (the suburbs in the former Auckland City Council territorial authority) has now topped one million dollars and is sitting at $1,003,144. Taking a closer look Auckland City-South is up 6.1% over the past three months and a massive 21.4% year on year. While Auckland City–East values rose 4.9% over the past three months and Auckland City–Centra was up 4.4% over the same period.

Waitakere City values have also continued to soar ahead increasing a massive 7.1% over the past three months and 19.4% year on year.

The average value in the Manukau City region is now $699,425. Taking a closer look, Manukau-Central rose a huge 7.0% over the past three months while Manukau-North West and Manukau East values both increased by 5.4% over the same period.

The average home value for the North Shore City area is pushing one million dollars and is now $988,124. Taking a closer look, North Shore-Onewa increased 6.5% over the past three months; North Shore-Coastal values are up 5.2% and North Shore–North Harbour values rose 5.5% over the same period.

Papakura District values continued to race ahead up 6.3% over the past three months; while Franklin District values rose by 4.8% and Rodney District values were up 3.3% over the same period.

“QV homevalue Auckland Registered Valuer James Wilson said, “June has seen a continuation of the strengthening market conditions across the Auckland region that we experienced throughout the first half of 2015.”

“Although market activity levels remain buoyant, there is a severe shortage of properties listed for sale, increasing competition amongst buyers which is further adding to upward pressure on values.”

“High levels of speculation are evident across all segments of the market as well as increasing evidence of the land-banking of properties which may offer the potential to sub-divide under the Proposed Auckland Unitary Plan.”

“Developers are reporting high demand for new residential dwellings as part of ‘house and land’ packages within new developments.”

“This is particularly evident for vacant sites within such developments which allow people to design and build without being tied to layouts provided by mass build companies. However, buyers of these sites do need to be aware of the restrictions imposed by covenants which are often placed on titles within such developments.”

“Buyers also appear to be willing to disregard the land tenure of a property in order to secure a well presented dwelling in a desirable locality meaning the traditional discount applied to Cross Lease property has been nearly eroded in some areas.”

Hamilton

The average home value across the Hamilton City region is now $381,793 and home values have increased 2.2% over the past three months; 4.4% year on year and they are now 5.6% higher than the previous peak of 2007.

Taking a closer look, values in Hamilton-Central and North West increased 3.1% over the past three months; Hamilton-North East values rose 2.9%; Hamilton South-West was up 2.6%; while Hamilton South East values increased 0.6% over the same period.

Residential property values in the Waipa District continued to an upward trend seen over recent months, rising 1.7% over the past three months, 5.5% year on year and they are now 9.1% higher than the previous peak of 2007.

QV homevalue Hamilton Registered Valuer, Chris Price said, “There continues to be a shortage of listings on the market in Hamilton.”

“More properties are selling at auctions and clearance rates via this method are increasing. Properties are also selling at a lower average number of days than usual for this time of the year.”

“Around 15.0% of all sales in Hamilton are to Aucklanders who are either using the equity to buy investment properties or are selling up and moving here as they can get more bang for their buck.”

“In the regional towns, Cambridge has continued to follow the upward trend of Hamilton. Agents there are reporting approximately 10% of purchasers are from Auckland and Te Awamutu is also seeing a slight upward surge both in terms of sales numbers and sale prices.”

Tauranga

Home values in Tauranga City have accelerated by 4.1% over the past three months and 7.3% year on year and for the first time they have ticked over levels seen in the previous peak and are now 0.8% higher than they were in 2007.

Values in the Western Bay of Plenty have also risen by 3.9% over the past three months, 4.8% year on year but they remain 3.3% below the previous peak of 2007.

QV homevalue Tauranga Registered Valuer David Hume said, “There has been significant demand and increasing property values across Tauranga and the Western Bay of Plenty over the past three months.”

“Homes in Tauranga and Papamoa are now selling much more quickly than they have for several years and value levels are now considered to be at or above the 2007 peak.”

“There is very strong demand from out of town buyers with approximately 60% of all people at open homes now from Auckland.”

“This has created a degree of panic for local buyers not wanting to get priced out of the market with the $300,000 to $500,000 range is seeing the biggest demand, also fuelled by historically low interest rates.”

“A much higher proportion of properties are being sold at auction as real estate agents are struggling to correctly price properties.”

“There has also been a sharp increase in sales in the $1 million plus range, as lower value benchmarks increase. Real estate agents reporting a 100% increase in sales in this price bracket in comparison to 2014.”

“In the Western Bay of Plenty, the market is strengthening, sales volumes are up across the board and buyers are coming from far and wide.”

“There’s been a significant increase in demand for property in Omokoroa in the last two months and the market there is frantically busy and there is a shortage of listings.”

“The recovery of the Kiwifruit industry has also exposed a real lack of rental accommodation in Te Puke which has resulted in increasing demand from investors looking to purchase rental properties for good rental returns.”

“Paengaroa has seen values of vacant section in new residential subdivisions increase by 50% in the last 12 months.”

“There is also strong demand in the $600,000 to $750,000 range in Te Puna with a significant increase in demand over the past two months which has resulted in a rise in home values there.”

Wellington

Home values in the Wellington region overall have risen 0.5% over the past three months, 1.5% year on year and they are now 0.8% over the previous peak of 2007.

The QV House Price Index shows the average value in Wellington City is now $546,577. Taking a closer look Wellington–West values rose 2.1% over the past three months, Wellington–East values were flat; Wellington Central and South values were up slightly by 0.2% and Wellington–North values were down slightly by 0.1% over the same period.

Home values in Lower Hutt City rose 0.8% over the past three months; Upper Hutt City rose slightly by 0.1%; Porirua City values were up 1.1 %; while values on the Kapiti Coast District were up 1.3% over the same period.

QV homevalue Wellington Registered Valuer, Pieter Geill said, “The Hutt Valley market is busy with some multiple offer situations occurring, but it is being limited by a lack of stock currently with listings down around 20% below what they normally are in the area.”

“This means we are seeing a winter downturn in respect to the number of listings, but there are plenty of buyers out there looking for the right property with only slim pickings to choose from.”

“While most people think winter is not a good time to put their house onto the market it is actually a good time to sell as right now demand is higher than supply.”

“However, vendors need to make sure their home is well priced, maintained and in good condition as it appears that any type of flaw is enough to make a buyer walk away and wait for something better to come along.”

“Unfixed faults in a building can lead to the property losing as much as a quarter of its market value as evidenced by a recent example in the area.”

“There has been some good activity in less expensive suburbs such as Taita, Stokes valley and Wainuiomata, but this has not translated to an increase in values there as yet.”

“Investors can get some very good yields, with blocks of flats offering between 7% and 9% return which is well more than they can get through term deposits with the bank.”

Christchurch and Dunedin

Home values in Christchurch City overall increased 0.5% over the past three months, 3.2% year on year and they are now 25.0% higher than in the previous peak of 2007.

Taking a close look, Christchurch-Hills home values rose 0.9% over the past three months; Christchurch-East was also up 1.3%; Christchurch-Central and North values increased by 0.6%; while Christchurch-Southwest values were down slightly by 0.5% over the same period.

Residential property values in the Selywn District are also down slightly by 0.1% over the past three months and while values in the Waimakariri District rose by 0.6% since April.

QV Christchurch Registered Valuer Daryl Taggart said, “The trends we have been seeing over the past few months are continuing as supply catches up on demand helping to reduce value growth and to flatten out the market.”

“This means Christchurch is now seeing a return to more normal market conditions with steady activity from both buyers and sellers in the market which has resulted in home values rising at a much slower rate than compared to the staggering values increases we saw between 2012 and 2014.”

“It’s no longer common for people to pay over the odds for a property due to high demand and it appears rents are also coming down and the premiums that had been common place have eased back to more normal levels.”

Values in Dunedin City as a whole were up 1.6% over the past three months, 2.6% year on year and they are now 3.4% above the previous peak of 2007.

Taking a closer look, Dunedin-Peninsula and Coastal home values had the highest increase up by 4.1% over the past three months; while Dunedin-Central and North home values rose 0.6%; Dunedin-Taieri values increased 0.5% and Dunedin-South values were up by 3.4% over the same period.

QV homevalue Dunedin Registered Valuer Duncan Jack said, “QV data is showing that values across the city are continuing to increase at a steady rate.”

“However, as is usual at this time of the year the market is experiencing the traditional ‘winter slowdown’ caused mainly by the fact that there is a severe shortage of properties listed for sale and this lack of listings is hampering activity in the market.”

“Buyers remain active and there is still good demand across most value ranges but there is not much choice so as a result most well-presented and located properties are selling reasonably quickly.”

Provincial centres

In the provincial areas it continues to be a mixed bag with some areas showing value rises, some flat and others showing a downward trend in values.

In the North Island, the Far North District and the Kaipara Districts both saw values rise 1.5% over the past three months and the Ruapehu District also saw a reverse in the a downward trend of the past few months, with valuer there up 1.2% since April.

In the South Island, the Central Otago District saw values rise 2.7% over the past three months while values in the Buller district continued to decline due to mine closures in the region, with values there down by 4.5% since April. Values in Ashburton were flat over the past three months while Timaru values rose by 1.0% over the same period with increases slowing in these towns in line with the Christchurch market.

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