Nationwide values rise; drops in Auckland, Hamilton and Chch

Nationwide property values rise but Auckland, Hamilton and Christchurch drop

The latest monthly QV House Price Index shows that nationwide residential property values for February increased 13.5% over the past year. Values rose by 1.1% over the past three months and the average value nationwide is $631,349. The nationwide average value is now 52.4% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 12.0% and values are now 28.5% above the 2007 peak.

Residential property values across the Auckland Region increased 12.8% year on year and quarterly growth has decreased by 0.7% over the past three months. The average value for the Auckland Region is now $1,043,680 and values are now on average 91.0% higher than the previous peak of 2007. When adjusted for inflation values rose 11.3% over the past year and are 61.0% above the 2007 peak.

The full set of QV House Price Index statistics for all New Zealand for February can be downloaded by clicking this link: QV House Price Index (HPI) for February 2017.

QV National Spokesperson Andrea Rush said, “The latest QV House Price Index figures show values have dropped over the past quarter in parts of Auckland, Hamilton and Christchurch and rate of value growth in Tauranga has also slowed as the latest round of LVR restrictions continue to take effect.”

“Meanwhile, values in the Wellington region continue to accelerate with values up more than 21.0% over the past year and 4.3% over the past quarter.”

“The Dunedin market also remains buoyant, with strong levels of activity and demand and continued steady value growth.”

“While parts of Auckland have seen values drop values continue to rise in central Auckland, Waiheke Island and in Rodney and Franklin.

“The same trend of negative growth was seen in parts of the Auckland market this time last year following the introduction of the 30.0% LVR rules for investors introduced in October 2015, then value began increasing again by April 2016.”

“So it’s possible the latest quarterly decrease seen in parts of the Auckland will be relatively short-lived as the market drivers of relatively low interest rates, strong net migration and a high number of sales to investors remain.”

Auckland
Home values have risen over the past three months in some parts of the Auckland region but have decreased in others as the latest round of LVR restrictions take effect.

The former Auckland City Council central suburbs rose 12.5% over the past year and 0.2% over the past three months with the average value now $1,224,673. Waitakere City values were up by 13.8% year on year but decreased 1.7% since December, with the average value dropping from $845,864 to $831,705. Values in the former Manukau city area rose 14.2% year on year but decreased slightly by 0.4% since December, with the average value down from $906,004 to $902,477. Values in the former North Shore City suburbs also rose 11.2% year on year but decreased 2.2% over the past three months from an average value of $1,224,477 in December to $1,196,987.

Rodney is still increasing with values there up 13.6% year on year and 1.4% over the past three months and the average value is $936,877. Franklin is also up 13.3% year on year and 2.4% since December and it has an average value of $663,638. Papakura values also increased 13.6% year on year and 0.9% over the past three months and the average there is now $686,465.

QV Auckland homevalue Manager, James Steele said, “There continues to be uncertainty around where home values are going and there has also been a surge in listings coming onto the market during February which is giving buyers more choice.”

“Properties at the lower end of the market in suburbs popular with investors tend to be not selling for the same premiums they were before the new LVRs came in.”

“However, there are some record sales prices still being achieved and there remains strong competition for homes in areas popular with both first home buyers, movers and investors not affected by the new loan to value ratio rules.”

“Building costs are also reported to be rising due to high demand leading to an increase in the price of some materials including timber framing, roofing, and steel. High demand for builders and trades people is also leading to lack of availability which is also slowing build time process and leading to higher costs.”

“Some investors, who have been taking a wait and see approach since the latest round of LVR restrictions, have reportedly started looking again to see areas where they may get a bargain.”

“Meanwhile, the latest CoreLogic Buyer Classification sales data showing the share of sales to Auckland first home buyers has dropped to a low of 19.0%, while the share of sales to Auckland investors has climbed back to the peak of 43.0% over the last month.”

“Some Auckland first home buyers are reporting having more difficulty raising finance due to stricter lending criteria.”

Hamilton
Hamilton home values have risen 16.7% year on year but have continued the downward trend seen recently dropping slightly by 0.8% over the past three months and values in the city are now 47.2% higher than the previous peak of 2007. The average value in the Hamilton is now $532,171.

QV homevalue valuer, Stephen Hare said, “There is still good activity and demand in the Hamilton market and there have been more listings coming onto the market during February.”

“Properties in the $400,000 to $500,000 range have become a rarity and are attracting strong demand first home buyers who are snapping them up very quickly.”

“There also continues to be strong interest for new builds in the suburbs of Flagstaff North and Rototuna.

“In the nearby Waipa District, Cambridge is continuing to see strong demand for homes with high turnouts at open homes and mid-range homes in the town are now selling for between $500,000 and $600,000. Sales ‘by negotiation’ are becoming the favoured way to sell in the current market rather than auctions which were more popular last year.”

“While other Waipa towns such as Te Awamutu continue to see good demand but are not as hot as Cambridge.”

“Towns that are in commutable distance to Hamilton, like Ngaruawahia, Raglan and Morrinsville are still experiencing good demand, mostly from first home buyers and some investors, but not as many as prior to the latest round of LVR restrictions.”

Tauranga
The Tauranga market continues to rise but at a slightly slower rate than prior to the LVR restrictions introduced late last year. Home values in Tauranga City up by 19.4% year on year and 1.3% over the past three months. The average value in the city is now $673,923. Meanwhile, the Western Bay of Plenty values there rose20.1 % year on year but decreased by 1.6% over the past three months. The average value in the district is now $581,540.

QV homevalue Tauranga, Registered Valuer, David Hume said, “The Tauranga market is off to a fairly robust start in 2017, although sales volumes are down on record levels this time last year.”

“The market for high end properties is showing signs of good growth over the last six months with Auckland buyers making up a good portion of demand.”

“Even with the new LVR restrictions out of town investors are still active in Tauranga given the more attractive yields to some other major centres.”

“Rental accommodation continues to be to in short supply with the median rental now at $450 up from $350 two years ago.”

Wellington
The QV House Price Index for the wider Wellington Region continue to rise with home values up 21.5% year on year and 4.3% over the past three months and values are now 29.4% higher than in the previous peak of 2007. The average value across the wider region there is now $589,784. Upper Hutt values jumped 25.5% year on year and 6.3% over the past three months. Lower Hutt values were also up a huge 25.0% year on year and 5.8% since December.

QV homevalue Registered Valuer, David Cornford said, “Buyer demand remains strong in the Wellington market with values still increasing, but at a more steady rate.”

“The market is less frantic than it was prior to the latest round of LVR restrictions, with fewer investors active in the market and buyers are taking a more measured approach.

First home buyers who are not affected by the new rules remain very active and according to the CoreLogic Buyer Classification data this group accounts for more than 30% of sales in the Wellington region currently.

“Upper Hutt continues to see strong demand from first home buyers and this is leading to continued strong value growth there.”

“New listings have continued to come to the market, as is typical for this time of year however there is still a shortage of available stock.”

“The Kapiti market is also still buoyant with strong activity and demand for housing on the coast resulting in a rapid rise in home values over the past year although the rate of increase appears to have stabilised recently.”

“ In Kapiti there are strong turnouts at open homes and many properties are selling quickly with multiple offers.”

“Currently the supply of properties for sale is not keeping up with demand and we can expect this imbalance to continue for some time as more people move into the region as transport links continue to improve.”

Christchurch
Home values in Christchurch City increased 2.8% year on year and have decreased slightly by 0.5% over the past three months and they are now 31.4% higher than the previous peak of 2007. The average value in the city is now $498,710.

QV homevalue Christchurch, Registered Valuer Daryl Taggart said, “The Christchurch market is showing normal levels of activity but with the supply of homes meeting demand, there is nothing driving value growth so home values are currently relatively steady.”

“Well-presented properties in desirable locations that are marketed for the right price are selling quickly and continue to be in strong demand.”

“Some investors have been ruled out of the market now it’s harder to gain finance following the latest round of LVR restrictions particularly now rents are lower than they were during the height of the rebuild.”

“However, there are still established investors with the means and ability to purchase in this market.”

Dunedin
The Dunedin market continues to be buoyant with city home values rising 15.6% year on year and a 5.3% over the past three months. Dunedin remains the most affordable city in New Zealand with an average value of $359,629. Dunedin-Coastal saw the highest growth over the past quarter with values there rising 6.9 % since December.

QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Buyers are still very active and there is good demand across all the value ranges in the Dunedin housing market with the low-mid range still being the most active.”

“Properties continue to sell very quickly with fierce competition from buyers, who are putting their best offer forward in the first instance.”

“Listing levels remain relatively low and appear to be fairly consistent with previous months.”

“The listing levels may well be partially affected by the quick turnover of stock and it certainly appears that demand is exceeding supply in the local market”

“The Christmas slow-down in the market was less significant this year compared to previous years.”

“Value levels are continuing to increase in the low to mid ranges. In the upper ranges, demand is still good but there hasn’t been the same notable value increases at this end of the market that we have seen for the low to mid-range properties.”

Nelson
Nelson home values have increased by 16.9% year on year and 5.0% over the past three months. The average value in the city is now $513,933. Values continue to rise in the Tasman District up 15.2% year on year and 2.9% over the past three months. The average value in the district has now topped half a million dollars and is sitting at $501,153.

QV homevalue Nelson Registered Valuer Craig Russell said, “Activity in the market has increased considerably in recent weeks after low sales volumes recorded over the January holiday period.”

“There has been a steady stream of new listings come onto the market during February and the market remains buoyant.”

“Investor activity appears to have cooled slightly given an upwards creep in interest rates, tighter lending restrictions, the new 40% deposit rules and increased values all combining to provide weakening returns for investors.”

“We have seen an increase in section values in Motueka with strong demand and a lack of sections available. Lifestyle properties particularly on the Waimea Plains have been sought after given they are easy contoured and are located in close proximity to amenities in nearby Richmond.”

Hawkes Bay
The rate of value growth in Napier has slowed a little, rising 18.8% year on year and 2.6% over the past three months. The average value in the city is now $419,190. The Hastings market continues to see strong value growth up 21.7% year on year and 5.8% over the past three months. The average value there is now $397,013.

QV homevalue Hawkes Bay Registered Valuer Michelle Drinkrow said, “The market is ticking along nicely and there are more properties on the market than there has been with some vendors holding out for top price expectations.”

“However, we have noticed some of the heat has come out of the market and buyers are not as frenzied as they were last year.

“While properties are still selling for good prices, buyers are acting in a calmer manner and are taking more time to perform due diligence in many instances.”

“Auctions and tenders remain the most popular methods of sale and both investors and first home buyers appear to still be active in the lower end of the market.”

“The demand for vacant land remains strong, with a shortage of available land in the main centres. Buyers looking for house and land packages in the region of $500,000 are generally not first home buyers and are movers looking to upgrade.”

Provincial centres

In the North Island, the regions to see the highest percentage value growth over the past three months were the Kaipara, Far North, Rangitikei and Kawerau districts with values in these areas rising more than 8.0% over the past three months. The only regions where values dropped in value over the past quarter were the Western Bay of Plenty, Stratford and South Taranaki.

In the South Island, the MacKenzie District saw values jump 9.0% over the past three months, while Central Otago was up 7.8% and Southland was up 6.9% over the last quarter. Values decreased over the past three months in the West Coast districts of Buller, Grey and Westland, as well as in Ashburton and Waimate.

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