7 March 2018
The latest monthly QV House Price Index shows nationwide residential property values for February increased 6.5% over the past year and 1.2% over the past three months. The nationwide average value is now $672,645. When adjusted for inflation the nationwide annual increase drops slightly to 4.9%.
Meanwhile, residential property value growth across the Auckland Region increased slightly by 1.0% year on year which is the slowest annual rate since August 2017. Values also ticked up slightly by 0.8% over the past quarter. The average value for the Auckland Region is now $1,053,948. When adjusted for inflation values dropped 0.6% over the past year.
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 February 2018
QV National Spokesperson Andrea Rush said, “Values continue to rise faster in Wellington, Dunedin and many regional centres than in Auckland.”
“The Hamilton and Tauranga markets have picked up in February after a sluggish start to the year while the Hawkes Bay continues to see some of the strongest value growth in the North Island.”
“Christchurch is the only main centre to see values drop over the past year, while many regional areas of the South Island continue to see values rise including Nelson and Tasman, Central Otago and the MacKenzie District as well as Southland and Invercargill.”
“Low interest rates and the easing in the LVR restrictions has seen many more first home buyers active in areas where they can still afford to enter the market, while some investors also appear to be becoming more active now they need a slightly lower deposit.”
The Auckland market remains mixed with some areas seeing values continuing to rise and others seeing values drop slightly. The former Auckland City Council suburbs rose 1.2% year on year but were down 0.2% over the past three months and the average value there is now $1,239,086. Waitakere values were down 0.8% year on year but they increased by 0.5% over the past three months. The average value there is now $825,362; North Shore values rose 2.9% in the year to February and 1.5% over the past three months; Manukau was flat at 0.0% change year on year, but values rose 1.3% over the past three months; Papakura values rose 2.3% year on year and 1.5% over the past three months and the average value there has now topped $700,000 and is sitting at $702,318; Franklin values also rose 1.6% year on year and Rodney values were also up 1.5% year on year.
QV Auckland Senior Consultant, James Steele said, “The market remains sluggish with values holding for the most part, with a lack of good quality listings on the market and lower than normal sales volumes for this time of year.”
“First home buyers remain active in the market and there is good demand for entry level housing stock. However, many are still finding it difficult to get the finance to purchase, with prices remaining high.”
“Properties that are not well presented, have outstanding maintenance or are damp or shaded for example are sitting on the market for longer. This is a change to when the market was very hot and everything was selling quickly.”
“Buyers appear to be more discerning and people are choosing not to sell as they are not guaranteed of being able to find anything else desirable in this market.”
“The rental market is very tight and rents have increased significantly in many areas over the past year, highlighting the lack of accommodation in the city.”
Hamilton City home values rose slightly by 0.8% over the past three months signifying a recent pick up in the market and values increased 3.1% in the year to February. The average value in Hamilton is now $548,417.
QV Hamilton Property Consultant, Andrew Jaques said, “The market appears to have bounced back after the Christmas break, with an upswing in the number of houses for sale and the number of buyers.”
“Confidence has improved with first home buyers being particularly active.”
“Activity is being driven by the fact that Hamilton’s population has continued to grow and low interests rates appear to be making it easier for people to service mortgages.”
“With the Reserve Bank move to increase the cap on banks from 10% to 15% of lending to home buyers with a deposit of less than 20.0% has also made it easier for some to purchase with a smaller deposit.”
“There is strong demand for land in high density zoned areas where duplex and townhouse developments are possible.”
“There is also a shortage in rental properties throughout Hamilton and this is likely due to a number of reasons including that rents are out of synch with the dramatic increase in property value thus yields have diminished; also student numbers are up following the government’s new tertiary policies; and the LVR ratios still require 25.0% deposit for the purchase of existing houses for rental purposes which is too high for many investors.”
Tauranga home values rose 4.9% year on year and 2.8% over the past three months. The average value in the city has now ticked over $700,000 and is sitting at $706,825. The Western Bay of Plenty market rose 7.0% year on year but dropped back 0.6% over the past three months. The average value in the district is now $622,227.
QV Tauranga Senior Consultant, David Hume said, “With such a great summer, activity in the market was slow initially to take off after the holiday period.”
“However, during February the market has shown good activity, with reports of properties with little interest in late stages of 2017, now getting multi offers.”
“The easing of the Loan to Value restrictions has helped market activity as have low interest rates and the strong regional economy here.”
“Stock levels in the Mount Manganui area are very low, with the top end of the market there remaining very strong and a substantial amount of building activity happening at present.”
“The Western Bay of Plenty market is also still seeing plenty of activity with Te Puke housing in demand off the back of the Kiwifruit market achieving record highs.”
“Buyers include those priced out of the Mount and Papamoa looking for bigger houses out of the city and the new highway has also eased congestion.”
“It seems Tauranga has now grown from a town to a city and along with this we are seeing that school zoning is also becoming more important with more traffic meaning the desire to be closer to schools has become far more prominent.”
“Now schools zones like Mount Manganui, Omanu and Bethlehem are commanding huge prices an example of this is sections in Bethlehem that were selling for $500,000 near Bethlehem College are now fetching around $850,000.”
Values across the whole Wellington Region rose 8.6% in the year to February and 3.1% over the past quarter and the average value is now $640,737. Wellington City increased by 7.6% year on year and 1.9% over the past three months and is the average value there is now $764,020.Meanwhile values in Upper Hutt rose 8.5% year on year and 1.0% over the past three months; Lower Hutt rose 7.7% year on year and 0.5% over the past quarter; Porirua rose 9.6% year on year and 2.1% over the past quarter and Kapiti Coast saw the greatest annual increase in the region with values there rising 13.9% year on year and 1.5% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “The Wellington market is still seeing plenty of activity although the rate of value growth has slowed a bit.”
“There is a lack of supply in the market particularly in Wellington City itself and Porirua, which is keeping prices up for those properties that are selling on the market.”
“However, the Hutt Valley is a bit flat but first home buyers remain very active accounting for 42.0% of sales in Lower Hutt and in 30.0% of all sales across the Wellington region so they are a big portion of the market.”
“Investor activity is pretty flat at the moment and yields have increased slightly due to strong rent growth and less promise of quick capital gains.”
“There is a shortage of rental property and this has driven rents up and it’s become very difficult to get a flat with potentially 20 or 30 or more people competing for the same property.”
“In many cases, before landlords even advertise their property for rent they are receiving enquiries from people desperate to find accommodation. A number of flats are renting without even being advertised.”
Christchurch city values continue to be relatively stable with values down slightly by 0.8% year on year and up 0.1% over the past three months. The average value is sitting at $494,563.
QV Christchurch Senior Consultant Daryl Taggart said, “These statistics confirm what we are seeing in the market which is that we are currently experiencing a period of low growth which has been a continuation of the same theme over the past 12-18 months.”
“In saying this, properties are still selling but we’re just not seeing an increase in values.”
“So far we’ve noticed no significant changes in activity from home buyers or investors since the easing of the LVRs in January.”
Dunedin residential property values are continuing to rise and have increased 9.3% in the year to February and 1.7% over the past three months. The average value in the city is now $392,921. Average values in Dunedin- Central and North and Dunedin – Taieri are now more than $400,000.
QV Dunedin Property Consultant, Aidan Young said, “Strong demand for residential property remains in the Dunedin market.”
“Buyers are not doing due diligence in many cases as any they have a fear of missing out by making offers conditional upon this and while the variety of offers can be significant, its cash unconditional offers that are becoming more common.”
“All sectors of the housing market appear to be performing well from the low to high range and the market sentiment is positive with reports that open homes are being well attended and that many buyers are becoming frustrated on missing out on properties.”
Nelson residential property values continued on their steady upward trending rising 10.5% year on year and 2.7% over the past three months. The average value in the city is now $567,767. Meanwhile values in the Tasman District have also continued to rise, up 12.9% year on year and 2.3% over the past three months. The average value in the Tasman district is now $565,643.
QV Nelson Registered Valuer Craig Russell said, “There has been a continuation of strong but steady market demand in the Nelson region particularly for homes priced at first home buyers.”
“Multi-offer situations are still common for properties up to $550,000 with offer prices tending to be within a smaller range of each other.”
“Properties that have deferred maintenance or outstanding repairs are however being discounted in the current market as due diligence clauses make a return.”
“Lifestyle properties have seen a big increase in value over the past few years with there being a strong demand between Richmond and Motueka along the Coastal Highway.”
“New quality homes in Stoke and Richmond are now selling in the $750,000 to $950,000 price bracket.”
“Access to finance has been an issue for investors and has contributed to a drop off in investor activity in the Nelson region.”
Values continue to rise across the Hawkes Bay region. Napier values rose 16.5% year on year and 3.1% over the past three months. The average value in the city is now $488,236. Hastings values are also continuing to rise up 13.8% year on year and 2.0% over the past three months. The average value there is now $451,686. The Central Hawkes Bay has also seen values jump 22.1% year on year and 8.1% over the past three months.
QV Napier, Senior Consultant, Philippa Pearse said, “The Hawkes Bay market remains buoyant with strong value growth continuing.”
“Investors are still active and include baby boomers looking for rental properties, or buying for family who can’t afford to get in on their own, or ahead of family moving back into the area from other areas or overseas.”
“There is also strong activity from first home buyers and investors in the lower valued areas of Napier and Hastings such as Akina, Mahora, Maraenui and Flaxmere where you can still purchase homes under $400,000 particularly from those looking to take advantage of the government grant and KiwiSaver.
“Central Hawkes Bay has seen value growth of more than 20.0% over the past year mainly due to increased demand from lower income families priced out of Napier and Hastings who now have to look further afield to more affordable homes.”
In the North Island, many other provincial centres continue to see stronger growth than is being seen in the Auckland region, particularly in areas closer to the Capital city such as in South Wairarapa where values jumped to rise up 23.2% year on year and 6.0% over the past three months; Masterton values were up 18.1% year on year and 2.8% over the past three months and Horowhenua where values rose 17.1% in the year to February and 2.6% over the past quarter. Meanwhile, nowhere apart from parts of Auckland saw values decrease over the past year although values were down in Kawerau, Stratford, Manuwatu and Tararua over the past three months.
In the South Island, the MacKenzie District continues to see a huge surge in growth with values rising 23.5% year on year and 8.1% over the past three months; Southland has also seen strong growth with values up 17.7% year on year and 4.9% over the past quarter and Invercargill values also rose 10.2% year on year and 3.2% over the past three months which is the strongest growth seen in the city since prior to the GFC.
For further specific comment on local areas:
Auckland: James Steele 0211445952
Hamilton: Andrew Jaques 022 678 4159
Wellington: David Cornford 027 4206 396
Tauranga: David Hume 021 02416943
Christchurch: Hamish Collins 021 554421
Dunedin: Aidan Young 0274759097
Nelson: Craig Russell 0276 997780