Market activity set to bounce back
Wednesday 16 January
There have been no dramatic changes to values over the past month, which is a likely result of the holiday season which generally sees less market buoyancy. At the same time, our qualified property consultants generally anticipate market activity to bounce back in the coming weeks, as the peak holiday period ends and the loosening of the LVR restrictions enable new buyers to enter the market.
The latest QV House Price Index shows nationwide residential property values have increased steadily over the past year by 3.2% and by 1.2% in the three months to December. The nationwide average value is now $682,938.
Meanwhile, residential property value growth across the Auckland Region decreased by 0.4% year on year although values did increase slightly by 0.1% over the past quarter. The average value for the Auckland Region is now $1,048,145.
“In saying this, the loosening of the LVR restrictions (taking effect from 1 January 2019) should enable some new first home buyers and investors to enter the market in the coming months. I don’t anticipate this impact to be overly significant, but it may help drive a busy property market in the early stages of 2019.”
“I am particularly interested in the rental market where we’re seeing a lot of competition particularly in the Wellington market. According to the Trade Me Rental Price Index, the cost of rent in Wellington is now very similar to Auckland which really does say something. With the Healthy Homes Bill due take to effect later this year, I’ll be closely monitoring the impact this will have on the supply and costs of rental accommodation.”
“Another point of interest is the continued growth on many smaller regional towns, particularly in the central and upper North Island. Kawerau, Carterton, South Waikato and Ruapehu in particular continue to see strong quarterly growth figures on top of solid annual growth.”
Value growth remains slow across Auckland's suburbs. North Shore values dropped 1.1% in the year to December and by 0.3% over the past three months. The average value there is now $1,212,664.
The former Auckland City Council central suburbs dropped 1.0% year on year and by 0.1% over the past three months and the average value there is now $1,233,311. Waitakere values decreased by 0.2% year on year and by 0.2% over the past three months. Manukau values increased by 1.2% year on year and by 0.9% over the past three months; Papakura values rose 0.6% year on year and by 0.2% over the last quarter and the average value there is now $701,230; Franklin values increased 1.1% year on year and Rodney values were up 1.1% year on year.
QV Auckland Property Consultant, Hugh Robson said, “It’s fairly steady here in Auckland, with well-presented properties close to services and amenities continuing to sell well. Investor demand appears to remain fairly steady although possibly it’s eased back over the past few months.”
Values across the whole Wellington Region rose 7.8% in the year to December and increased 3.2% over the past quarter and the average value is now $688,074
Wellington City values increased 7.4% year on year and by 2.3% over the past three months and the average value there is now $813,052. Meanwhile, values in Upper Hutt rose 12.1% year on year and 5.7% over the past three months; Lower Hutt rose 6.7% year on year and 4.2% over the past quarter; Porirua rose 9.4% year on year 5.3% over the past quarter. Finally, the Kapiti Coast rose 5.7% year on year and 2.2% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “The holiday season is now behind us and market activity will start to pick up, however it’s not until after Wellington anniversary weekend that the market really kicks into gear.”
“The first three months of the year is generally a busy period in the market with buyers coming to the Capital City to enhance their employment and educational opportunities. We’re also seeing families join the pool of buyers, including those who’ve made plans over Christmas to upgrade or whose New Year’s resolutions include re-housing plans.”
“Stock levels remain low, however we should see a wave of fresh listings come to the market over the next three months providing buyers with a bit more choice.”
“Tight supply, low interest rates, as well as a slight relaxing of the Loan to Value Ratios (LVR’s) is likely to combine to form a relatively buoyant property market at the start of 2019. Despite this, value growth is expected to continue to moderate over 2019 as affordability issues put a damper on the market.”
“First home buyers have had a strong presence in the market over the last two years and we expect this to continue into 2019, particularly given a slight relaxing of LVR’s.”
“Late 2018 saw a relatively settled market with modest value growth and buyers are continuing to take a measured approach with more sales being conditional on getting bank finance and other conditions such as builders reports”
“Rents are increasing in the Wellington region as a shortage of rental accommodation continues with the cost of renting in Wellington now similar to Auckland.
“The extremely competitive rental market has also meant tenants are increasingly choosing to renew their fixed terms or roll over their leases. It’ll be interesting to see what effect the abolishment of letting fee’s and increased compliance costs will have on rents over 2019.”
Hamilton City home values decreased by 0.2% over the past three months and values increased 5.0% in the year to December. The average value in Hamilton is now $570,886.
Tauranga home values rose 3.9% year on year and by 1.6% over the past three months. The average value in the city is $720,645. The Western Bay of Plenty market rose 4.9% year on year and 3.8% over the past three months. The average value in the district is now $654,083.
It’s a continuation of recent trends for Christchurch City, with values either holding or dropping slightly. Values are slightly up year on year and also increased by 0.5% over the past three months. The average value in the city is now $496,562.
QV Christchurch Property Consultant Hamish Collins said, “The market has remained stable over the Christmas period, with no big value movements. Market activity is subdued which it typical at this time of year. We expect listings and buyer enquiry to increase in the coming months.”
“Interestingly, real estate agents are reporting that most activity over the Christmas period is coming from first home buyers in the $350,000 - $450,000 value range.”
Values in Dunedin continue their upward trend having increased 11.2% in the year to December and 3.5% over the past three months. The average value in the city is $434,903.
Nelson residential property values rose 8.4% in the year to December and by 2.4% over the past quarter. The average value in the city is now $601,571. Meanwhile, values in the Tasman District have also continued to rise, up 6.0% year on year and 1.0% over the past three months. The average value in the Tasman district is now $589,630.
QV Nelson Property Consultant, Craig Russell said, “Sales volumes have been strong over the summer months, with demand still strong and values increasing at a moderate rate. Vacant rural residential sections, in particular, have been sitting on the market for an extended period in recent months.”
“First home buyers continue to be active participants in the market, particularly in the traditional first home buyer areas such as Stoke, Tahunanui and Nelson South.”
Napier values rose 10.2% year on year and by 3.0% over the past three months. The average value in the city is now $526,506. Hastings values are also continuing to rise up 12.1% year on year and 7.4% over the past three months. The average value there is now $498,871.
In the North Island, Kawerau, Carterton and South Waikato lead the way in quarterly growth, with value growth of 22.7%, 9.9% and 9.1% respectively. In terms of annual growth, Kawerau leads the way, up 30.1% followed by Wairoa (27.4%) and Ruapehu (20.9%).
In the South Island, Southland, Invercargill and Gore regions lead the way in quarterly growth, with value growth of 6.8%, 3.2% and 2.6% respectively. Invercargill leads the way in annual growth, up 11.6%, followed by Nelson (8.4%) and Central Otago (8.4%).
Annual change in values
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