The latest monthly QV House Price Index shows that nationwide residential property values for March increased 12.9% over the past year. Values rose by 0.6% over the past three months and the average value nationwide is $631,432. 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 11.4% and values are now 28.5% above the 2007 peak.
Residential property values across the Auckland region increased 12.3% year on year and quarterly growth has decreased by 0.2% over the past three months. The average value for the Auckland Region is now $1,045,362 and values are now on average 91.3% higher than the previous peak of 2007. When adjusted for inflation values rose 10.8% over the past year and are 61.2% above the 2007 peak.
The full set of QV House Price Index (QVHPI) statistics for March 2017 - can be downloaded by clicking this link:
QV National Spokesperson Andrea Rush said, “The Wellington region continues to see some of the strongest value growth of any area in New Zealand, particularly in more affordable areas outside the central city such as Porirua and the Hutt Valley.”
“Values also continue to rise steadily in Dunedin which remains New Zealand’s most affordable city and Tauranga values have slowed to quarterly growth of just 0.6%.”
“Meanwhile, values in parts of Auckland, Hamilton and Christchurch are still seeing a slight downward trend, but values are stabilising and continuing to rise in other parts of these main centres as well.”
“This means the downward trend and dampening in these markets seen since the latest round of LVR restriction may be shallower than expected.”
“It’s possible we may see values start to rise in these main centres in coming months given that the market is still being driven by a high number of sales to investors, record high net migration, relatively low interest rates, a lack of supply and fewer taxes on property investment than many other countries.”
While the overall figure for the Auckland region has decreased slightly by 0.2% over the past three months, home values in some areas have now stabilised and are continuing to rise in some areas of Auckland.
The former Auckland City Council central suburbs rose 12.5% over the past year and 0.9% over the past three months and values are now 97.5% above the previous peak of 2007. The average value in the central suburbs is now $1,229,715. Waitakere City values rose by 12.1% year on year but decreased slightly by 1.4% over the past three months. They are now 95.5% above the previous peak of 2007. Values in the former Manukau city area rose 12.6% year on year but decreased slightly by 0.5% over the past quarter. The average value in the southern suburbs is now $900,324. Values in the former North Shore City suburbs also rose 11.5% year on year but decreased 1.4% over the past three months. The average value across the bridge is now $1,201,367.
Rodney values continue to rise up 13.3% year on year and 1.2% over the past three months and the average value is $940,701. Franklin is also up 13.1% year on year and 1.1% over the past quarter. Papakura values also increased 12.6% year on year and 1.2% over the past three months.
QV Auckland homevalue Manager, James Steele said, “Sales volumes are down on what they were this time last year as the LVR restrictions continue to dampen parts of the market.”
“However, the top end of the market where cash buyers are not affected by the LVRs continues to see strong value growth with the upmarket suburbs selling more readily and are seeing stronger value growth than those in cheaper parts of Auckland such as the city’s southern and western outskirts.”
“This is leading to higher value areas seeing property values continuing to rise in desirable areas with larger homes in central suburbs such as Remuera and Mission Bay.”
“Also Waitakere’s upmarket suburbs such as Titirangi and Parau that offer larger homes and sections for relatively good value for money have been in high demand from those looking for better bang for their buck.”
“While areas with lower value investor housing stock such as Manurewa, Papakura in the south, Hillcrest and Sunnynook on the North Shore, Ranui and Glen Eden in the West – areas previously dominated by investor demand have seen values drop back.”
“However, while first home buyers face less competition for entry level homes, prices are still too high for most and there are reports that some deals are falling over at the finance stage with some having trouble securing finance due to stricter criteria from banks.”
“The latest CoreLogic Buyer classification data shows sales to investors have hit a high of 44.0% and that the share of sales to cash buyers not affected by the LVR restrictions has increased while first home buyers have dropped to a record low of 19.0% of Auckland sales.”
The downward trend seen in Hamilton home values seen since the introduction of the latest round of lending restrictions has continued in some parts of the city but other areas are now seeing values stabilising and rising again. Overall values for Hamilton city have risen 15.7% year on year and they have decreased slightly by 0.4% over the past three months and they are 47.4% higher than the previous peak of 2007. The average value in the Hamilton is now $532,888.
QV homevalue Hamilton valuer, Stephen Hare said, “While the Hamilton market is not as frantic as it was this time last year and values have plateaued, there is still good demand for properties.”
“Homes in the low to mid price bracket of the Hamilton market of between $400,000 and $500,000 are still attracting a lot of interest from first home buyers as well as from investors.”
“Auctions have become less attractive with recent results seeing more properties being passed in and instead selling with a listing price and by negotiation has become more common place with vendors less inclined to auction their homes in the current market.”
“With the Hamilton City market seeing values plateau, we are now seeing a levelling out in value growth in surrounding small townships such as Ngaruawahia, Huntly and Te Awamutu.”
“Meanwhile Cambridge continues to see strong demand for properties. Locality plays a huge factor with Cambridge being considered a very desirable location for people to live.”
The Tauranga market continues to rise but at a much slower rate than prior to the LVR restrictions introduced late last year. Home values in Tauranga City up by 18.3% year on year and 0.6% over the past three months. The average value in the city is now $676,381. Meanwhile, the Western Bay of Plenty values continue to rise more quickly, up 18.7% year on year and 3.3% over the past three months. The average value in the district is now $590,608.
QV homevalue Tauranga, Registered Valuer, David Hume said, “In a similar trend to what’s being seen in Auckland, the high end of the Tauranga market is doing well with some record prices achieved.”
“There have been large value increases in the $1 million plus bracket of the market as local and out-of-town cash buyers not affected by LVRs continue to move or invest in Tauranga, purchasing high-end properties.”
“At the low-end and mid-range of the market things are less frantic and rather than seeing 10-way multi-offers on a property after the first open home, we are instead seeing the market return to a more normal situation with good demand for property and slightly fewer offers on each property now Auckland investors are less active in the market here.”
“First home buyers are active but are finding that while the LVR changes have seen less competition from investors for entry level property, stricter lending criteria and higher prices are making it more difficult for them to gain finance to buy.”
“Many first home buyers continue to looking outside of Tauranga for more affordable property in Te Puke, Te Puna and other outlying rural areas for more value for money which continues to drive values of homes and lifestyle property up.”
“The new Tauranga Northern Link will reduce commuting times to Te Puna and similar road improvements have led to significant property value increases in areas such as Paengaroa, so it’s likely this will also happen in areas north of Bethlehem once the roading project is completed.”
The QV House Price Index for the wider Wellington region continues to rise with home values up 21.2% year on year and 3.7% over the past three months and values are now 30.7% higher than in the previous peak of 2007. The average value across the wider region there is now $595,501.
Wellington City values are up 20.8% year on year and 3.3% over the past three months and the average value there is now $716,613. Porirua values are up the most over the past three months rising a massive 7.1% since January and 25.4% year on year. The average value there is now $511,483. Meanwhile, Upper Hutt values are still accelerating up 26.6% year on year and 4.7% over the past three months. Lower Hutt values are also still rising rapidly up 25.6% year on year and 5.4% since January.
QV homevalue Registered Valuer, David Cornford said, “Values have continued to increase in Wellington on the back of strong buyer demand with value growth remaining fairly consistent at just under 4.0% per quarter.”
“Upper Hutt has seen the largest year on year value growth followed closely by Lower Hutt and Porirua.”
“First home buyers continue to look to these regions as they struggle to secure a home in Wellington City where average values are now over $700,000.”
“First home buyers remain active in the market at record high levels. Investors are also active however some are struggling to secure finance since the introduction of LVR restrictions last year."
“There is strong demand for new builds and “off plan” purchasers as they are exempt from the LVR restrictions introduced last year and the Wellington City Council recently announced a rates rebate for first home buyers who build new property or purchase off plans.”
“Property values in the Wairarapa towns have continued to see strong value increases above 6.0% over the past three months. The southern Wairarapa towns that are closer to Wellington such as Greytown and Featherston have become an increasingly popular destination for first home buyers who have been priced out of the Wellington market.”
Home values in Christchurch City are rising again in all areas across the city apart from Banks Peninsula after seeing a downward trend following the LVR coming in late last year. Values increased 2.4% year on year, 0.6% over the past three months and they are now 31.0% higher than the previous peak of 2007. The average value in the city is now $497,120.
QV homevalue Christchurch, Registered Valuer Daryl Taggart said, “The market is a little patchy in terms of buyer demand and sales prices being achieved.”
“There have been more listings coming onto the market which is usual for March which is often the most popular time to sell however given that demand has been lower since the latest round of the LVR restrictions this is meaning buyers have more choice.”
“There is still very good demand for housing at the entry level bracket of the market, with strong competition amongst first home buyers for properties priced under $450,000.”
“However, in the next level up with homes priced over $600,000 we are not seeing as much demand as it’s out of reach for most first home buyers and those movers looking to trade-up are a lot more fussy.”
“There are also more listings available in this price bracket meaning buyers have a better choice in this market and can negotiate, however the right home in the right locality will sell very quickly.”
The Dunedin market continues to be buoyant with city home values rising 15.4% year on year and a 2.7% over the past three months and values are now 27.1% above the previous peak of 2007. Dunedin remains the most affordable main centre in New Zealand with an average value of $363,821. Dunedin-Coastal saw the highest growth over the past quarter with values there rising 19.6% in the year to March and a huge 9.5% over the past three months.
QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Listing levels continue to be at low levels meaning its slim pickings for buyers and more competition for those properties that are on the market.”
“Home value levels continue to increase with reports of strongest demand being within the mid-price range of $300,000 to $400,000.”
“The upper price ranges are also in demand but are seeing less growth compared to the lower end of the market.”
“Multi offers continue to be the norm with buyers competing strongly which is continuing to drive prices and value levels.”
“Both local and out-of-town investors remain very active within the Dunedin market.”
Nelson home values continue to see strong value growth up 16.9% year on year and 4.5% over the past three months. The average value in the city is now $522,201. Values continue to rise in the Tasman District up 16.3% year on year and 2.7% over the past three months. The average value in the district is now $512,754.
QV homevalue Nelson Registered Valuer Craig Russell said, “There has been increased activity within the $1,000,000 plus price bracket with strong prices being achieved, particularly for lifestyle holdings on the Richmond periphery.”
“Section prices continue to climb with some eye watering prices being achieved in some instances. “There have been numerous developments pre sell sections prior to earthworks commencing.”
“We are seeing a reduced margin on rental yields with values rising and long term interest rates creeping up. This has contributed to less investor activity in the market.”
“With such strong value level growth over the past 12 to 18 months affordability has become a major issue with some overextended homeowners at risk from a rise in interest rates.”
“Those looking to get onto the property market are also finding it difficult obtaining a suitable property within their budget.”
Napier values are up 17.9 % year on year and 1.9% over the past three months. The average value in the city is now $422,945 and values are now 24.3% above the previous peak of 2007. The Hastings market continues to see strong value growth up 20.4% year on year and 3.0% over the past three months and the market is now 27.9% higher than 2007. The average value there is now $398,612.
QV homevalue Hawkes Bay Registered Valuer Michelle Drinkrow said, “The Hawkes Bay housing market is continuing to see plenty of interest, with good sale prices being seen but some of the heat appears to have come out of the market with less frenzied buying.”
“The odd property is passing in at auction or staying on the market for longer than expected, but this could be more due to unreasonable vendor price expectations who are still holding out for big money.”
“There are very few vacant sections currently available however we understand there are several new developments starting in the near future across the region which should help with the current high demand.”
“We are now starting to see a few buyers moving out of the main centres to more rural locations and commuting into town for work in search of lifestyle or more bang for their buck.”
In the North Island, all areas saw values rise over the past year. Areas just south of Auckland continue to see strong growth with South Waikato District values up 35.7% year on year, and strong value growth continuing in the Hauraki, Waikato, Matamata Piako andThames/Coromandel districts. Rotorua also continued to see strong growth with values up 28.2% since March 2016 and 4.5% over the past three months. Values are rising in Whakatane, Opotiki, Gisborne, Rangitikei, Whanganui, Palmerston North and the Horowhenua after many years of relatively low value growth.
The only areas to see values decrease over the past quarter were some parts of Auckland and Hamilton, Wellington-West, Stratford, Waitomo and the Kawerau District where recent massive percentage value growth appears to have peaked.
In the South Island, most areas saw values rise over the past year with the exception of the Grey District on the West Coast. The MacKenzie District once again saw the highest annual value growth up 30.6% year on year and 9.5% over the past three months. While Central Otago District was also up 22.8% year on year and a huge 10.0% over the past three months.
While values decreased in the Hurunui, Ashburton, Waimate, Grey and Buller districts over the past three months.
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QV National Spokesperson
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