New rules take heat out of Auckland market, boost regions

STRICLY EMBARGOED UNTIL 12 NOON 1 DECEMBER, 2015

New rules take heat out of Auckland housing market and give regions a boost

The latest monthly QV House Price Index shows that nationwide residential property values for November have increased 15.0% over the past year which is the fastest rate since February 2006. Values rose 4.0% over the past three months and are now 34.1% above the previous market peak of late 2007. The average value nationwide is now $555,729. When adjusted for inflation the nationwide annual increase drops slightly to 14.5% and values are now 14.0% above the 2007 peak.

The Auckland market has increased 24.4% year on year, 6.5% over the past three months and is now 70.5% higher than the previous peak of 2007. When adjusted for inflation values are 23.9% over the past year and are 44.9% above the 2007 peak. The average value in the Auckland region is now $931,807.

QV National Spokesperson Andrea Rush said, “Home values in Auckland are still increasing but at a slower rate than last month and it appears new rules to curb investors along with restrictions on the capital flow out of China have led to an easing in the market.”

“Meanwhile, the Wellington market is showing a definite upward tick in values along with Dunedin which is also on the rise, as investors look to new markets around the country.”

“After a slow start to spring the Christchurch is also showing more activity with values there rising in most places at a faster pace than it did over the winter months.”

“Increased interest and activity by investors or movers in many other regional markets around the country is leading to value rises in places with little growth over many years including Rotorua, Taupo, the Far North and Invercargill.”

“Net migration continues at record highs and interest rates lower than 4.0% are now being offered ahead of the expectation the Reserve Bank will lower the OCR this month, so it will be interesting to see how these factors impact on the market after Christmas.”

Auckland
Home values across the Auckland Region continued to show value increases over the past year although the QV House Price index line is starting to shows a less steep gradient which may be indicative of the easing of value increases in the market over the past month.

Values in the former Auckland City Council suburbs have increased 22.8 % since November last year and 6.1% over the past three months. The average value there is now $1,095,480.

Waitakere City home values increased by 28.4% since this time last year and 6.3% over the past three months. The average home value in the west is now $747,664.

Values in Manukau have increased by 27.8% since November 2014 and are up 8.0% over the past three months and the average value there is now $796,950.

Home values in the Papakura District values are now 32.0% higher than they were this time last year and they increased by 8.9% over the past three months. While Franklin District values rose by 19.5% year on year and 5.3% over the past three months and values in the Rodney District were up 18.7% year on year and 6.6% over the past three months.

QV homevalue Registered Valuer, James Wilson said, “The recent measures introduced by the Government and the Reserve Bank to address house price inflation could be one of the factors causing a ‘softening’ effect that is now being felt in the Auckland market for the first time in many months.”

“Investors are adopting a “wait and see” approach as they want to see how the market reacts to the recent measures and the decrease in rental yields achievable in the city also appear to be further fuelling the more cautious mentality prevalent amongst buyers.”

“The number of houses being sold at auction continues to be well down on earlier this year with some agencies reporting clearance rates as low as 30%, when they had been regularly around 85%.”

“So far we are not seeing any drastic price easing in the statistics, but we can definitely say that activity is well down on previous months. Whether this will correlate to values decreasing across the board remains to be seen.”

“However, anecdotal evidence suggests that value levels among some categories of housing, in particular investment housing stock may have fallen.”

Hamilton
Home values across Hamilton City have continued to rise over the past three months with values increasing 18.6% year on year and 8.7% over the past three months and values are now 20.6% higher than 2007 levels. The average value in the city is now $435,848.

Values in the Waikato District also continued to steam ahead up 17.8% year on year and 6.7% over the past three months; while values in the South Waikato were also up 7.1% over the past three months and 14.0% since November last year.

QV homevalue Hamilton Registered Valuer, Chris Price said, “There continues to be lots of activity in the under $400,000 range of the market from first home buyers and investors who continue to compete against each other.”

“Auction attendance appears to be lower than it has been over recent months with fewer people bidding. However there has been no noticeable difference in prices paid as yet and the market still appears to be reasonably buoyant.”

“Anecdotal evidence is that values are still growing but at a slower rate than what has been recently experienced.”

Tauranga
Residential property values in Tauranga City have risen 15.5% since November 2014 and 6.6% over the past three months and values there are now 9.2% higher than the previous peak of 2007. The average value in the city is now $525,758.

Western Bay of Plenty home values have also continued to show solid increases rising 7.3% year on year and 2.6% over the past three months. Values in the district have now ticked over levels seen in 2007 and are 0.5% higher than the previous peak.

QV homevalue Tauranga Registered Valuer David Hume said, “Overall it’s been a very strong year for the Bay of Plenty property market, with most Tauranga suburbs witnessing exponential growth over the past six to nine months.”

“It appears some of the heat has come out of the market, with auction rooms not receiving the record clearance rates witnessed over the past few months, although vendors with reasonable expectations are quickly negotiating a sale post auction.”

“Arataki is continuing to prove very popular with locals and out of town buyers who have been priced out of the Mount Maunganui market. A renovated 100 square metre dwelling on a 458 square metre site (4 Leander Street) set a new benchmark for the area when it sold under the hammer for $601,000 earlier this month.”

“The announced commencement of the Bayfair to Baypark link before Christmas is welcome news to locals, particularly for Papamoa residents commuting to Tauranga, who have to navigate heavy congestion during peak times.”

“The new infrastructure will include two flyovers which are scheduled to be open to the public by 2020, not long after the completion of the Maungatapu underpass.”

Wellington
The QV House Price Index for the Wellington region is now showing a definite tick upwards after being flat for quite some time.

Home values in Wellington City increased by 3.9% since November last year and 2.1% over the past three months and they are now 4.8% higher than the previous peak of 2007. The average value in the capital is now $558,211.

Values in Lower Hutt also increased 4.2% since this time last year and 2.8% over the past three months. Upper Hutt values also rose 3.1% year on year and 2.9% since August. Porirua home values were also up, 3.2% year on year and 2.8% over the past three months while values on the Kapiti Coast increased by 2.7% since November last year and 1.7% since August.

QV homevalue Wellington Registered Valuer Kerry Buckeridge said, “Across the Wellington region there is shortage of stock and a high interest and demand from buyers in what stock is available.”

“This market turnaround has happened quickly. Three or four months ago buyers were thinking about how much they could get away with paying for the property they wanted, and now there has been a shift in thinking to, how much do I have to pay to secure the property I want.”

“Many properties are receiving multiple offers, particularly in the first home buyer category."

"There is also high demand for apartments which could be due to the tight supply in the first home market and apartments being a more affordable entry into the property market.”

“In terms of values, in Wellington some areas are selling for more than 10% above the previous market peak in 2007, however in parts of the Hutt Valley properties are still selling similar levels to the previous peak of 2007.”

“Sales volumes also continue to be constrained by a shortage of stock. In the Hutt Valley there are 30% less on-line listings on Trademe than this time last year."

"It’s possible the shortage of listings across the city could in part be due to some people deciding to keep their existing home as a rental investment when trading up to a second or larger home.”

Christchurch
Home values in Christchurch City rose by 2.9% since November last year and 0.9% over the past three months and values in the city are now 26.6% higher than the previous peak of 2007. The average value in the city is now $480,464.

Values in the Selwyn District were up 2.7% year on year and 1.1% over the past three months; while values in Waimakariri were up 1.3% since this time last year, but down slightly by 0.1% over the past three months.

QVhomevalue Christchurch, Registered Valuer Damian Kennedy said, “The Christchurch housing market is steady overall and while there was less activity than normal in early spring the market has now picked up and is quite busy.”

“Most of the demand for property in the city is coming from Christchurch locals, and there not much activity or demand from out of town investors in the market currently.”

“This may be attributed to a softer rental market and lower growth rates over the past 12 months"

"Christchurch is still however in a positive growth climate with year on year figures showing 2.9% increase.”

“There continues to be many ‘as is where is’ coming onto the market now that more insurance claims are being cash settled. It is possible these sales may be skewing some statistics as damaged properties sell for way below normal market values for similar repaired and insured properties.“

“This may be making areas where there are higher numbers of homes being sold ‘as is where is’ to look like there’s been little value growth statistically, when in reality repaired and insured homes are generally achieving good prices and values have risen in these areas. Parts of the city most likely affected by this phenomenon are Lyttleton, the Hills suburbs and Eastern suburbs.”

“In the inner city there’s still a lack of new large scale residential apartment developments however we note smaller scale apartment and townhouse developments have been very well received by the market and good prices have been achieved.”

Dunedin
Home values in Dunedin are continuing to show steady increases up by 5.1% year on year and 2.4% over the past three months. Values are now 7.1% above the previous peak of 2007. The average value in the city is now $306,614. Dunedin Central and North values were up the most, rising 4.0% over the past three months and 7.5% year on year.

QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Listing numbers continue to be low with a further reduction these past week. This could possibly be due to vendors deciding to wait until after the Christmas holidays to put their properties on the market.”

“However there is still very good demand from buyers across the board in all value ranges particularly in the entry level price bracket of the market between $200,000 and $250,000.

"Out of town investors continue to be active in the market, attracted by the relatively good yields Dunedin offers compared to other major centres around the country which have much higher average home values.”

“Properties continue to sell quickly with minimal marketing periods and multi offer scenarios continue to be common and in general value growth remains steady with some renovated properties showing good capital gain.”

Provincial centres
In the North Island, nearly all places showed an increase in values over the past year, with many showing steady value growth over the past year after a long period of little or no growth. The Far North District saw values rise 7.2% year on year; Whangarei rose 10.7%; Thames/Coromandel was up 7.7%; Taupo increased 6.9% and Rotorua home values were up 8.6% over the same period. The only places to show a decrease in value were: the Ruapehu District down 2.7% over the past year but values there did increase over the past three months; Carterton decreased slightly by 0.7% year on year and Tararua District was down by just 0.8%

In the South Island, values in many centres also showed value increases with the MacKenzie District increasing the most, up 18.1% year on year; followed by Queenstown Lakes District where values rose was also up 9.3%. Invercargill saw home values rise after a period of flat or negative growth, up 5.0% year on year and values in Marlborough increased 5.3% over the past year. Meanwhile values on the West Coast in the Buller and Grey Districts continued on a downward trend decreasing by 5.3% and 3.9% respectively over the past year, off the back of mine closures in the districts.

The full set of QV House Price Index statistics for all New Zealand for November can be downloaded by clicking this link: QV House Price Index for November 2015.

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