It was a disparate year for residential property values with a general trend of slowing in the rate of growth due to LVR speed limits, stricter retail bank lending criteria and uncertainty ahead of the election, along with periods of rapid value increases in some areas and decreasing values in others.
Overall the nationwide average shows residential property values increased 6.6% or $41,660 during 2017 from $627,905 in December 2016 to $669,565 in December 2017, according to the latest QV House Price Index statistics. The average national value increased 3.6% over the final three months of 2017.
The full set of QV House Price Index statistics for all New Zealand for December can be downloaded by clicking this link: QV House Price Index (HPI) for December 2017.
Sales volumes were down on 2016 for every month during the year and between February and October they were in excess of 20% below 2016 levels before picking up in November when a post-election late spring surge saw them jump to just 10% lower than November 2016 levels.
QV National Spokesperson, Andrea Rush, “A slow-down in the rate of value growth in the housing market that began in the latter part of 2016 with the introduction of LVR speed limits requiring a 40% deposit by investors continued throughout 2017.”
“The frenzy in the market of the previous three years induced by high numbers of investors in the market subsided and we saw a return to more normal levels of activity in housing markets around the country.”
“By October nationwide annual value growth had slowed to 3.9%, the lowest rate of growth seen in five years and for the Auckland Region it slowed to -0.6%, the slowest annual rate of growth seen there since 2011.”
“High prices, constraints on finance caused by tightening in retail banks lending criteria and higher deposit requirements removed many buyers from the market and sales volumes plummeted.”
“Potential housing policy changes in the lead up to the election also caused uncertainty and people took a wait and see approach causing activity to slow dramatically over the winter quarter and this resulted in value decreases in many areas.”
“The usual annual spring surge was very slow to arrive and listing levels and market activity did not pick up until November and December and this can be seen in both sales volumes and value growth recovering in the last two months of the year.”
“The annual rate of value growth recovered to 6.4% in November and 6.6% in December and sales volumes for November lifted 21.0% higher than in October. This was partly due to buyers delaying purchasing until the election result was decided and may also have been in part due to some buyers racing to purchase before the new foreign buyers’ ban in December.”
“The slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity and demand in housing the market as we move through the summer months.”
“Low interest rates, relatively high net migration and lack of supply means market drivers remain and we are likely to see values hold for the most part during 2018 in the main centres but the trend of lower rates of growth is likely to continue.”
“However, areas where investors were previously very active may continue to see values drop back where prices remain too high for first home buyers particularly in Auckland, Hamilton and surrounding districts.”
“Some regional areas may continue to see stronger value growth than the main centres during the year.”
Of the main centres Porirua city, Napier, Hastings and Whanganui saw the greatest percentage growth during the year.
The average value across the wider Auckland region increased 0.4% or $4,583 from $1,047,179 at December 2016 to $1,051,762 at December 2017. Values rose 1.2% over the past three months.
Annual growth ticked up again across the Auckland region in the final quarter of 2017 with most areas seeing values rising again. The former Auckland City Council central suburbs saw values rise 2.2% in the year to December and 1.6% over the final quarter of the year with Auckland City - East continuing to rise above average for the region, up 3.6% year on year and 2.8% over the past three months, the average value there is now $1,575,133. Strong value growth also continues for Auckland City – Islands with the Waiheke Island market driving growth up 13.7% in the year to December and 6.6% over the final quarter of the year.
North Shore values also ticked up again rising 0.7% in year on year and 2.6% over the final three months of the year. Waitakere values also rose 1.0% over the final three months of 2017 although values were down 1.9% in the year since December 2016.
Meanwhile, values are also increasing again in both Rodney and Franklin and particularly in Papakura which rose 2.2% year on year and 2.6% over the final three months of the year. Manukau bucked the general trend as values there dropped 1.0% year on year and 0.3% over the past three months.
Values in Hamilton dropped slightly by 0.5% over the past three months but rose on average by 1.6% or $8,586 over the past year from an average of $534,860 in December 2016 to $543,446 in December 2017.
Tauranga home values increased 3.2% year on year or $21,528 from an average value of $672,197 in December 2016 to $693,725 in December 2017. After dipping in November, values in the city had begun rising again by December and values rose 1.0% in the final quarter of the year.
Meanwhile, the Western Bay of Plenty market has seen sustained growth throughout 2017 and rose 9.1% in the year to December or $52,185 from an average value of $571,520 in December 2016 to $623,705 in December 2017. Values rose 1.4% over the past three months.
Values across the wider Wellington Region rose 9.4% or $ 54,040 over the past year from an average value of $574,410 in December 2016 to an average value of $628,450 in December 2017. Values across the region rose 3.6% over the last quarter of 2017.
Wellington City increased by 9.1% year on year and 3.3% over the past three months. The average value there is now $756,879. Wellington – North is up the most, increasing by 6.2% over the past three months alone and 11.2% in the year to December 2017. Meanwhile values continue to rise strongly across Wellington’s regional centres. Upper Hutt is up 11.1% year on year and 2.6% over the past three months; while Lower Hutt rose 11.4% year on year and 1.0% over the past quarter; and Porirua rose 13.2% year on year and 3.7% over the past quarter. Finally, the Kapiti Coast is up 13.5% year on year and 3.8% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “It was another year of relatively strong value growth throughout the Wellington region however year on year value growth slowed considerably during 2017 compared to 2016.”
“Value growth took a breather over the winter months and during the build up to the election however by mid spring market activity had started to pick up and value growth continued.”
“A shortage of stock, low interest rates and a relatively strong local economy continues to support a robust property market in the Wellington region.”
“First home buyers had a strong presence in the Wellington market throughout 2017.”
Christchurch city values have remained stable, dropping slightly by 0.1% or $541 over the past year from an average value of $494,247 in December 2016 to $493,706 in December 2017. Values have increased slightly by 0.4% over the past quarter.
Meanwhile, growth remains strong across Canterbury’s regions. The Waimakariri District up 1.7% year on year and 1.5% over the past three months; while Selwyn values increased slightly 0.3% year on year and 0.7% over the past quarter.
QV Christchurch Property Consultant, Hamish Collins said, “It’s been slow and steady for the Christchurch housing market during 2017. We have seen less activity than in previous years as heat comes out of post-earthquake market and overall the market has normalised after the earthquakes”
“The high level of housing stock on the market has given purchasers’ more options and vendors are finding they need to adjust their expectations from a moving post-earthquake market to a slower environment.”
“First home buyers remain active in the market as do those purchasing “as is where is” properties with existing unrepaired earthquake damage.”
“Those in the investor market remain anxious about potential changes to regulations such as insulation, building warrant of fitness and taxes and investors have also been hamstrung by LVR and bank lending restrictions throughout the year.”
The recent trends continue as residential property values continue to rise across Dunedin. Values rose 10.4% or $36,965 over the past year from an average value of $354,133 in December 2016 to an average value of $391,098 in December 2017. Values increased 2.7% over the final three months of 2017.
Of particular interest is the strong growth of the Peninsular and Coastal part of Dunedin, which is up 5.6% over the past three months and 17.9% year on year, followed by the Southern area which increased 5.4% over the last three months of the year and 10.9% year on year.
QV Dunedin Property Consultant, Aidan Young said, “Demand for residential property in Dunedin has remained strong, from both the local and national buyers throughout 2017.”
“First home buyers have remained active throughout the year with the lower entry point of the Dunedin market aiding this situation.”
“The LVR restrictions had little effect on values, although it did see an easing in demand from investors due to the 40% deposit requirement.”
“Supply has been consistently low, with good quality properties being sold relatively quickly and vacant land has also been receiving good prices as demand for sections remains strong.”
“The upper end of the market has seen some slight shifts, indicating good confidence for higher priced homes.”
“The election appeared to slow activity, but we have not seen any material impacts yet.”
“Value growth has been moderate during 2017 and we can expect to see a similar positive outlook for the market in 2018, providing conditions remain.”
Nelson residential property values continue to increase, rising 11.1% or $55,318 year on year from an average value of $499,866 in December 2016 to $555,184 in December 2017. Values rose 1.8% over the last three months of 2017.
Meanwhile, values in the Tasman District have also continued to rise, up 11.4% or $56,927 year on year from an average value of $499,082 in December 2016 to $556,009 in December 2017. They increased 3.0% over the last quarter of 2017.
QV Nelson Property Consultant Craig Russell said, “The Nelson/Tasman market experienced strong value growth over 2017 despite a slow winter period in the build up to the election.”
“The market here is considered to be more robust than other regions given the strong local economy and being a desirable place to live.”
“Low interest rates continue to fuel demand which has outpaced supply. This is particularly true for section sales with pent up demand driving up land values as new stages of developments are released to the market.”
“During 2017 we saw a surge in activity for high value properties being sold particularly around Ruby Bay/Tasman, Nelsons Port Hills, College area and Atawhai.”
“Listing numbers remained relatively stable in 2017 with a decrease occurring in winter which we consider a normal seasonal trend.”
“Sales volumes decreased in 2017 compared with the previous year as homeowners either chose to renovate over buying, or were simply priced out of the market.”
“Investor activity also eased during the year following the introduction of the 40% deposit requirement in late 2016.”
Values continue to rise across the Hawkes Bay region. Napier values rose 15.1% or $62,770 year on year from an average value of $415,189 in December 2016 to an average value of $477,959. Values rose 2.6% over the past three months.
The Hastings market also continues to rise up 14.9% or $57,828 year on year from an average value of $387,133 in December 2016 to an average value of $444,961 in December 2017. Values increased 3.0% over the last three months of the year.
Other Provincial centres
The growth in values across many central and lower North Island provincial areas continues. Values in regions including South Waikato, Opotiki, Rangitikei, Tararua and Carterton have increased particularly over the past three months. Meanwhile, provincial areas to the South and North of Auckland – including the Kaipara, Hauraki and Thames Coromandel District - continue to see values decrease despite the trend of market growth over the past few years.
In the South Island regional centres, it’s a relatively stable outlook. Values across most areas are either flat or steadily increasing. The MacKenzie District continues to rise up 5.2% over the past three months and 24.7% year on year which is the highest annual rise in the country, while Southland and Invercargill are also continuing on an upward trend. Market growth remains strong in the Queenstown Lakes, as values increase 3.0% over the past three months with an average current value now much higher than the Auckland Region of $1,111,995.
For further information or specific local comment please contact:
Nationwide: QV National Spokesperson Andrea Rush 021 866 152
Wellington: David Cornford 027 4206 396 Christchurch: Hamish Collins 021 554421
Dunedin: Aidan Young 0274759097 Nelson: Craig Russell 0276 997780