Queenstown average value tops $1 million dollars

STRICLY EMBARGOED UNTIL 12 NOON DECEMBER 1, 2016

Queenstown average value tops $1 million dollars

The latest monthly QV House Price Index shows that nationwide residential property values for November have increased 12.4% over the past year, which is the slowest rate since May 2016. Values rose by 2.0% over the past three months and are now 50.8% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 12.1% and values are now 27.8% above the 2007 peak. The average value nationwide is $624,675.

The Auckland market has increased 12.8% year on year which is the slowest rate since January 2015. Home values in the Super City rose by 3.7% over the past three months and are now 92.4% higher than the previous peak of 2007. When adjusted for inflation values rose 12.6% over the past year and are 63.1% above the 2007 peak. The average value for the Auckland Region is $1,051,387.

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 (HPI) for November 2016.

QV National Spokesperson Andrea Rush said, “The latest QV House Price Index figures show the Queenstown District has followed the Auckland Region to post an average value over $1 million dollars, after recording a massive 32.2% rise in residential property values over the past year.”

“This comes as the latest round of LVR restrictions have led to a weaker than normal spring as a reduction in demand for investor housing stock has resulted in more subdued value growth and has seen nationwide quarterly growth to ease back to 2.0%.”

“While values continue to rise in most parts of New Zealand, the trend of a slowing rate of growth continues for Auckland, Hamilton, and Christchurch.”

“The Wellington market which had previously been very buoyant has now also started to see some of the heat coming out of the market as the new LVRs take effect there.”

“Regional centres with entry level properties under $300,000 are not seeing the same impact of the new LVRs and many continue to see strong demand and value growth including the Hawkes Bay, Rotorua, the Hauraki and Waipa Districts and Dunedin.”

“The latest CoreLogic Buyer Classification Data reveals the new LVR restrictions have not yet led to any significant decline in the share of sales going to multiple property owners; nor to investors in the Auckland market, which has remained at 43%, since they were introduced.”

“It’s too soon to tell what impact the recent earthquakes will have on property values and the brief freeze on new insurance put in place straight afterwards has now been lifted in most case subject to building inspections.”

“The recent earthquake series are a reminder that disaster can strike at any time and it is crucial for owner homers to ensure they are adequately insured.”

Auckland
Home values across the Auckland region are continuing to rise but at the slowest rate since January 2015 as new LVR restrictions take effect.

The former Auckland City Council central suburbs have increased by 11.6% over the past year and 3.6% over the past three months .The average value there is now $1,222,371. Waitakere City values were up by 13.1% year on year and 4.8% over the past three months. The average value in the Western suburbs is now $845,864. Manukau suburbs were up by 13.7% year on year and 2.8% over the past three months, the average value there in the South is now $906,004. Values in the former North Shore City suburbs also rose 12.5% year on year and a 3.5% over the past three months and the average value there is now $1,224,477. Meanwhile the Rodney District has seen the strongest growth over the past year rising 15.2% year on year and 6.2% over the past three months.

QV Auckland General Manager, Jan O’Donoghue said, “It’s a tale of two different markets in Auckland currently.”

“We are continuing to see strong demand in the $1.5 million dollars plus bracket and the new build market which is resulting in high sales prices being achieved for these properties.”

“But at the same time there’s been a significant reduction in demand for entry level investor housing stock particularly in Manukau over the past month and sales prices for this type of property have reportedly dropped back by as much as 20 to 30% on what was being achieved earlier in the year.”

“There has been a late surge of new listings coming onto the market from buyers wanting to sell prior to Christmas and this increased the sense that it’s currently more of a buyers’ market that it has been since the beginning of the year in some areas.”

“The new build and off the plan markets remain strong while demand for older apartments has eased off which may be due to investors having more difficulty raising finance to purchase them.”

“Since the US elections there have been reports of higher buyer inquiry from foreigners looking to relocate to New Zealand and also Kiwis living abroad looking to return to New Zealand.”

Hamilton
Home values across Hamilton City have risen 23.1% year on year and 3.5% over the past three months and values there are now 48.4% above the previous peak of 2007. The average value in the city is now $536,565.

QV homevalue Hamilton Valuer, Stephen Hare said, “The recent LVR restrictions appear to have taken some of the heat of the Hamilton housing market and we are now seeing the results of a slowdown in demand.”

“Demand is still there for well-priced and well maintained Hamilton properties, however any that are priced too high or have any issues are tending not to sell nearly as easily in the current market as they would have earlier in the year.”

“While many properties are still going to auction a larger proportion are being passed in and then are usually being sold shortly after by negotiation, often below the vendor’s reserve.”

“As time goes on more and more properties are being listed by expressions of interest, negotiation and with a price, rather than by auction given the lower auction clearance rates.”

“In the regions, there is still good demand for Cambridge and Te Awamutu residential properties but the trend is similar to Hamilton where properties with issues or where the vendor’s price expectations are too high are taking longer to sell.”

“The Hauraki District has seen a surge in demand with buyers from Hamilton and Auckland as the towns in the area offer a lower value base.”
“Sections in Ngatea are selling quickly with first home buyers and commuters attracted to the smaller rural service town for its schooling (Hauraki Plains College) and proximity to Hamilton and Auckland.
“There are very few listings in the Hauraki District currently and supply is unable to keep up with high levels of demand from buyers.”

Tauranga
The Tauranga market continues to rise, with home values in Tauranga City up by 26.5% year on year and 5.0% over the past three months. The average value in the city is now $665,155. Western Bay of Plenty home values have risen a massive 30.5% over the past year and 6.0% over the past three months alone. The average value in the district is now $591,202.

QV homevalue Tauranga, Registered Valuer, David Hume said, “Tauranga properties in the $700,000 -$1,000,000 price bracket still showing very good demand as are the higher value properties in the plus $1.5 million bracket.”

“Lifestyle properties are continuing to show good demand as they are perceived as being better value for money in comparison to the strong Tauranga property market.”

“There is a noticeable decrease in demand from less established “Mum and Dad” local investors who can no longer raise finance under the new LVR rules and they are now locked out of the market. However, there are reports the new rules are not impacting on local or foreign cash investors who are still actively purchasing properties, and are not impacted as they don’t need to raise finance.”

Wellington
The QV House Price Index for the wider Wellington region shows home values rose 20.6% year on year and 5.5% over the past three months and values are now 24.1% higher than in the previous peak of 2007. The average value across the wider region there is now $565,631.

QV homevalue Registered Valuer, David Cornford said, “While strong demand across the Wellington market continues to lead to value growth and strong sale prices, the market is slightly less buoyant than it was.”

“Some sales were frozen mid settlement after the recent earthquakes as insurers refused to roll over cover on properties from vendor to buyer.”

“Most insurers are refusing to offer new cover to buyers until they can provide a new builders report completed after the earthquakes which means a number of deals have been stalled. It seems to be business as usual now, providing a builders report has been sighted.”

“The recent earthquake series are a reminder that disaster can strike at any time and it is crucial for owner homers to ensure they are adequately insured”
“The number of properties listed for sale on the market remains relatively low however there has been a late spring surge of new listings recently.”

“First home buyers are active and are filling most gaps left by some investors who have been taken out of the market due to new LVR restrictions and changes to lending rules.”

“Open homes are well attended however there have been reports that they are attracting less attention since the implementation of LVR restrictions.”

“We have seen strong demand for new builds and off the plan purchasers, particularly in Churton Park, Whitby and Aotea and there has been a noticeable increase in requests for construction valuations which may be aided by the lower deposit rules for new builds.”

“In the wider region, the market remains very buoyant in Kapiti with most sales selling well.”

“The key drivers are a shortage of housing stock which has plagued the region for some time, increasing number of buyers from outside the region seeing Kapiti as a viable alternative to Wellington, the climate/beach atmosphere, and nearing completion of the expressway.”

“Most agents are reluctant to price properties and most transactions are occurring through the tender or auction process. This is resulting in a high number of sales well above expectations.”

“Wairarapa values are increasing however at a slower rate compared to Wellington. There is a lack of listings on the market and agents are struggling to find new listings there currently.”

Christchurch
Home values in Christchurch City increased 4.3% year on year and 1.7% over the past three months and they are now 32.1% higher than the previous peak of 2007. The average value in the city has now ticked over half a million dollars and is $501,229.

“QV homevalue Christchurch, Registered Valuer Damian Kennedy said, “The Christchurch housing market has been quieter than normal for spring and sales volumes are lower than usual for this time of the year.

While there have been some new listings coming onto the market, there has been a reduction in buyer demand since the new LVR restrictions took effect and it’s likely they have taken some investors out of the market.”

The latest CoreLogic Buyer Classification data shows the number of investors in the Christchurch market has decreased since the new LVR restrictions were announced in late July and there’s also been a reduction in the number of Auckland investors present in the market.”

“After the Kaikoura earthquake there was a freeze put on new insurance and while this has been lifted some insurers are requiring building inspections to be completed before transferring insurance from sellers to buyers, which is required to complete a sales transaction.”

Dunedin
Dunedin city home values have risen 11.4% year on year and 2.3% over the past three months. The average value in the city is now $341,604.

QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Value levels are continuing on a steady upward trajectory.”

“Residential properties are continuing to sell extremely quickly particularly for those priced within the lower to mid value ranges but the higher ranges are also selling faster than they have done in recent years.”

“There are reports of properties selling within a day or two of being listed and there continues to be fierce competition from buyers and this continues to drive the strong levels of demand and increasing value levels.”

“Any slowdown in market activity and value growth nationally caused by the recent LVR restrictions on investors is not yet apparent in the Dunedin housing market.”

“Any suburbs with a good proportion of low to mid value housing stock are experiencing particularly strong activity for example Green Island, Abbotsford, Wakari and Halfway Bush. All suburbs however are receiving strong interest from buyers.

Hawkes Bay
Napier home values continued to see strong growth rising 20.5% year on year and 5.7% over the past three months. The average value in the city has not topped $400,000 and is sitting at $408,509. Hastings values rose 18.1% year on year and 4.3% over the past three months. The average value there is now $375,175.

QV homevalue Hawkes Bay, Registered Valuer Bevan Pickett said, “The Hawkes Bay housing market is still experiencing strong market activity and value growth across all price brackets driven by high demand and a lack of supply.”

“We have seen a late spring flurry of listings coming onto the market from people keen to sell their properties in before Christmas and it appears some vendors may be concerned the market may cool in the New Year so want to sell now.”

“The owner occupier market is strong, and the latest CoreLogic buyer classification data shows an increasing share of sales going to those moving home and also to first home buyers.”

“There’s also been a slight increase in the percentage of sales going to Auckland investors, while the share of sales to local and other investors has dipped slightly since the new LVR restrictions on investors were announced in late July.”

Nelson
Nelson home values have increased by 15.4% year on year and 3.3% over the past three months. The average value in the city is now $489,338. The Tasman District also increased by 12.2% over the past year and 5.1% over the past three months. The average value in the district is now $487,011.

QV homevalue Nelson Valuer Hayley Dabinette said, “The Nelson and Tasman housing markets are continuing to see strong levels of activity and demand.”

“However the recent LVR changes for investors appears to have taken some of the heat out of the investment property market and there are reports that some buyers are finding it harder to secure finance with banks tightening their lending restrictions.”

“There‘s been a late Spring surge of listings coming onto the market in Nelson this month with 229 properties listed on the market, compared with only 175 at the start of the month.”

“Despite this there’s still strong competition and the majority of listings are receiving multiple offers and in turn are selling for good prices. We have noted several examples of properties selling within a week of being listed and cancelled open homes as a result.”

“There is currently very strong demand for vacant sites with many prospective buyers wishing to build their own house given the more relaxed lending and lower deposits required for new builds compared with existing, established properties.”

“However, there very few new vacant sites coming onto the market as it is common for developers and/or housing companies to buy most of the sections in a new subdivision and sell them as house and land packages.”

“Those sites that have come onto the market recently, and in particular in Richmond, have sold out very quickly with many hopeful buyers missing out.”

“The majority of all new subdivisions in the region have long waiting lists of buyers hoping to secure a section once they are released. This particular trend is in turn increasing the demand for newly built homes and thus, driving up prices.

“There’s also been an increase in demand and price for higher value new homes in particular, 4 bedrooms executive homes in Richmond and in the last few months a number of record sales have taken place in the mid $700’000s through to $900,000.”

In regards to the Kaikoura earthquake, the majority of insurance companies placed a temporary four-day freeze on new insurance. We understand this was lifted by most insurance companies on November 18 for houses pre-insured by the vendor.

New insurance may still be subject to a building insurance report and confirmation of no earthquake damage to the property.

We strongly recommend that sellers contact their insurance companies to confirm their insurer’s stance in relation to their particular property so that they can pass on the correct information to prospective buyers.

Other Provincial centres
In the North Island, once again all areas seeing residential property values increase over the past year.

Rotorua District continued to see strong value growth rising 27.7% year on year and 7.2% over the past three months and the nearby Kawerau District saw values rise 52.9% year on year and 3.9% over the past three months but comes off a low base with an average value still of only $158,602 making it one of the cheapest places in New Zealand to purchase a home.

In the South Island, the stand-out performing was the Queenstown Lakes District where values rose 32.2% year on year and 7.5% over the past three months and the average value has now topped $1 million dollars. The Mackenzie District saw values rise 20.1% year on year and 10.4% over the past three months. While the Grey District was the only place to see values decrease over the past year down 2.1% and values there are now 15.0% below the previous peak of 2007.

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