Press Release – QV Valuations
Auckland and Hamilton values ease while nearby regions see strong growth
The latest monthly QV House Price Index shows that nationwide residential property values for January increased 13.5% over the past year.Values rose by 1.4% over the past three months and the average value nationwide is $631,302. 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.
The Auckland market has increased 12.8% year on year and quarterly growth eased back to just 0.2% over the past three months. The average value for the Auckland Region is $1,047,699.
Residential property values in the wider Auckland region are now 91.7% higher than the previous peak of 2007. When adjusted for inflation values rose 11.3% over the past year and are 61.6% above the 2007 peak.
The full set of QV House Price Index statistics for all New Zealand for January can be downloaded by clicking this link: QV House Price Index (HPI) for January 2017
QV National Spokesperson Andrea Rush said, “The latest QV House Price Index figures show value growth in Auckland, Hamilton and Christchurch continues to ease and in some parts of these cities quarterly value growth is now decreasing.
“Values continue to rise in Tauranga, Wellington and Dunedin amidst relatively buoyant market conditions compared to the other main centres.”
“We are now seeing a strong trend of value growth in regional centres around the country, particularly those situated within two to three hours’ drive of the main centres that have seen very strong value growth recently such as Auckland, Wellington and Queenstown.”
“These include the Kaipara District just north of Auckland where values accelerated 6.4% over the past three months and 25.9% since January last year led by strong growth in places like Mangawhai now a favourite for those who are selling up and moving out of Auckland.”
“Similarly the Hauraki District south of Auckland and also commuting distance to Hamilton and Tauranga accelerated 10.8% over the past three months and 30.3% year on year with towns like Paeroa and Ngatea in high demand from movers and investors alike.”
“Values in regions near Wellington such as the Kapiti Coast, Horowhenua and the South Wairarapa have also risen between 5.0 and 7.0% since November, as those priced out of the Wellington market look further out for affordable property.”
“The MacKenzie District in the South Island has jumped 9.7% since November and 26.9% year on year as those priced out of the Queenstown, Wanaka and the surrounds look to places like Tekapo and Twizel for lakeside property.”
“It’s possible rising mortgage interest rates and the new LVR rules will continue to constrain the rate of value growth during 2017. However, this will be balanced by continued record high net migration and a lack of housing supply particularly in Auckland. As well as the fact New Zealand property can be brought freehold and has fewer taxes on property compared with many other countries, meaning it remains a highly attractive investment to foreign buyers.”
QV Auckland homevalue Manager, James Steele said, “The Franklin District has seen the strongest growth in the Auckland region over the past quarter with values rising by 2.9% since November as buyers look further out to find more affordable property.”
“Places such as Waiuku, Pukekohe and coastal areas south of Clevedon are experiencing strong demand and value increases due to higher demand from investors and home buyers alike.”
“There still is a high demand in this area for new build dwellings with both land and house packages, and design and build packages happening within the new developments of Pukukohe, Patumahoe, Waiau Pa and Kingseat.”
“There’s been a similar trend north of Auckland with the Rodney- North seeing the strongest growth in the Auckland region over the past year – up by 14.5% year on year. This has been driven by stronger demand in places like Wellsford, Warkworth, Matakana and surrounding areas.
“However, quarterly value growth there has eased from 3.6% quarterly growth last month to 1.6% quarterly growth this month most likely due to the impact of the LVR restrictions.”
“Meanwhile, the Waitakere city, North Shore and Manukau housing markets have been slow going with vendors having to adjust their price expectations down to sell and open home attendances have been slow from November through January.”
“It appears people may be taking a wait and see approach until after Waitangi weekend when people are back to it and it appears people aren’t willing or able with new loan restrictions to pay the premiums that they were in the first half of 2016.”
Hamilton home values have decreased 1.1% over the past three months however values are 18.6% higher year on year and 47.0% higher than the previous peak of 2007. The average value in the city is now $531,337.
QV homevalue valuer, Stephen Hare said, ““The Hamilton market has experienced a typical seasonal low over the Christmas period and values have levelled out.”
“We continue to see two-tiers in the Hamilton City housing market with properties above $550,000 continuing to attract buyers and those below $550,000 failing to sell at auction and taking longer to sell.”
“This is due to investors not being as active in the market since the introduction of the new LVR restrictions late last year. This means there is less competition for first home buyers and as a result they are becoming more active in the market.”
“A higher proportion are of properties are being passed in at auctions and this is leading to more being sold with expressions of interest, by negotiation and or with an asking price.”
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 20.7% year on year. The average value in the city is now $672,752.
Meanwhile, the Western Bay of Plenty values there rose 21.1% in the year since January 2016. The average value in the district is now $575,089.
QV homevalue Tauranga, Registered Valuer, David Hume said, “It appears 2017 has gotten off to a solid start in the housing market with improved attendance at open homes and a number of acceptable pre auction offers now people have returned from holiday.”
“While the Western Bay of Plenty popular beachside location along Pukehina Parade has seen exceptional growth over the last six months with older holiday baches on half sites now selling for $350,000 to $400,000 up from $250,000 12 months ago.”
The QV House Price Index for the wider Wellington Region shows home values rose 20.6% year on year and 4.2% over the past three months and values are now 27.8% higher than in the previous peak of 2007. The average value across the wider region there is now $582,322.
Upper Hutt has seen the strongest growth with values there rising 23.8% year on year and 6.9% over the past three months. Values have also accelerated in Horowhenua and on the Kapiti Coast since November rising 7.2% and 5.4% respectively.
QV homevalue Registered Valuer, David Cornford said, “Since Wellington anniversary weekend fresh listings have started coming to the market and this is likely to increase over February and March which are typically busy months in the market.”
“First home buyer activity has surged to record high levels at 30% of all sales in the Capital.”
“Positive net migration into Wellington, relatively low interest rates and a continued shortage of listings supply on the market are all factors which indicate the Wellington property market is likely to continue to perform well in 2017.
“Rising house prices and strong demand for property has led to a shortage of rental stock in Wellington and rents have surged around 10% over the last year. It’s not uncommon to have 20 plus groups inspect a rental property and many landlords are asking applicants to submit a highest bid as part of the application process.”
“Given market conditions and the current rent squeeze, it’s likely that Wellington rents will increase further over the next few months.”
Home values in Christchurch City increased 2.8% in the year since January 2016 but have decreased slightly by 0.2% over the past three months and they are now 31.1% higher than the previous peak of 2007. The average value in the city is now $497,539
“QV homevalue Christchurch, Registered Valuer Damian Kennedy said, “The Christchurch market has rebounded in activity in the last couple of weeks of January after a slow lead up to Christmas which is now being seen in the latest statistics.
“Listings and activity have picked-up significantly over the past couple of weeks as people come back from holiday.”
“First home buyers are active in the eastern suburbs with less competition from investors following the introduction of the LVR restrictions late last year.”
Dunedin city home values continue to rise steadily. Up 15.5% year on year and a strong 5.1% over the past three months. The average value in the city is now $359,055. Dunedin-Taieri saw the strongest growth with values up 17.5% year on year and 6.0% since November.
QV homevalue Dunedin Registered Valuer, Duncan Jack said, “The Dunedin market continues to see values rising with the trends of recent months continuing.”
“The market remains buoyant with strong competition from buyers. The market is certainly more active for the Christmas season than it has been for some years and we have not experienced the usual seasonal slowdown over the holiday period.”
“The levels of listings in Dunedin appear to be fairly constant. The turnover of sales is quick with very short listing periods.”
“Buyers and sellers in the Dunedin market are definitely in action with anecdotal evidence suggesting that activity continued right through the holiday period. The market experienced very little if any slowdown during this time.”
Nelson home values have increased by 16.4% year on year and 5.0% over the past three months. The average value in the city is now $508,343. The Tasman District also increased by 14.2% over the past year and 2.6% over the past three months. The average value in the district is now $498,111.
QV homevalue Nelson Registered Valuer Craig Russell said, “There has been strong market activity to start the year with good numbers at open homes and multiple offers presented in some circumstances.”
“Demand continues to exceed supply in the residential property market and low listings levels are contributing to competition amongst buyers and driving prices up.”
“Easy contoured vacant sections in close proximity to good schooling have been highly sought after which is leading to an increase in land values and in turn contributing to rising property values in the region.”
“However, with interest rates are now past their historic lows and beginning to creep upwards as the cost of offshore funding increases. Increased funding costs and uncertainty going forward may impact market confidence in the region but as yet we have not seen any sign of a slow-down in the market.”
In the North Island, many of the regional centres continued to see steady value growth including Rotorua and Palmerston North. The areas to see the strongest percentage growth over the past three months were the Far North District up 8.3%; the Central Hawkes Bay up 9.1% and the Kawerau District where values spiked a further 16.6% and they are up a staggering 57.5% year on year but of course come off a low base. Gisborne also saw strong value growth, rising 5.9% over the past three months and 17.2% year on year.
All parts areas in the North Island saw values rise in the year since January 2016, however values have decreased over the past three months in parts of Auckland and Hamilton as well as Western Bay of Plenty, Opotiki, Wairoa and South Taranaki.
In the South Island, many areas saw positive value growth over the past year. Queenstown Lakes District values continued to accelerate up 6.0% since November and 30.7% year on year. The MacKenzie District continued to benefit from the overflow of rising values in Queenstown and Wanaka, with values there rising 9.7% since November and 26.9% year on year. The only place in the South Island to see a decrease in values over the past year was the Buller District, while over the past three months values dropped in parts of Christchurch, Ashburton and Buller.