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Media release: Hawkes Bay region stands out from the rest

13 Feb 2019

QV Media Release: Hawkes Bay region stands out from the rest
 
Wednesday 13 February
 
The Hawkes Bay region is seeing some of the strongest value growth in New Zealand, while many regions experience a slowdown in the rate of growth.
 
Hastings, in particular, stands out with quarterly growth of 10.8% while Central Hawkes Bay continues to build on a strong annual growth figure of 19.6%.
 
New Zealand’s main centres such as Dunedin and Wellington are seeing a slight drop in the rate of quarterly value growth compared to previous months. Wellington City, in particular, has typically seen quarterly growth in between 1.9-3.9% over the previous five months. However, this figure dropped to 1.0% in January, which is its lowest quarterly growth figure since August 2018.
 
The latest QV House Price Index shows nationwide residential property values have increased steadily over the past year by 2.9% and by 0.9% in the three months to January. The nationwide average value is now $684,468. Meanwhile, residential property value growth across the Auckland Region decreased by 0.9% year on year and by 0.1% over the past quarter. The average value for the Auckland Region is now $1,045,775.
 
For a full breakdown of the QV House Price Index figures for January please click here
 
QV Senior Consultant, Paul McCorry said, “Our latest figures reflect what we’re observing in the market. Affordability constraints and low supply continue to maintain modest value growth across most areas.”
 
“While the loosening the LVR restrictions will have enabled some new buyers to enter the market, this has been offset by a number of policy changes – both confirmed and anticipated – that has put a dampener on investor enthusiasm in the short term. It’s likely many investors are taking a ‘wait and see’ approach; they’re holding off buying or selling until key policy changes, such as the Capital Gains Tax, gets debated in government in the coming weeks.”
 
“Wellington is an excellent example of the modest growth we’re currently seeing. The city, with an average value of $817,944, has seen its lowest rate of quarterly growth since August last year at 1.0%. Many suburbs in the wider region, including the likes of Lower Hutt and Porirua, have also seen value growth slow. The one exception being Upper Hutt, which still offers first home buyers a “more affordable” entry-level average value of $532,632 and has seen values grow 5.3% over the last quarter.”
 
“Interestingly, premium areas such as the Queenstown Lakes - where the Foreign Buyer Ban was anticipated to have the greatest impact – continues to see a solid quarterly growth figure of 3.0%. In contrast, another high value area which may have had an impact from the ban, Auckland, continues to see values remain flat.”
 
“Values haven’t slowed everywhere. In the Hawkes Bay, we have seen strong annual and quarterly growth. Napier is up 11.3% from this time last year and 4.3% in the last quarter alone, while Hastings and Central Hawkes Bay have posted similarly positive results. When you consider the warm climate and great lifestyle on offer in the Bay, with an average value of just over $530,000 it offers a more affordable alternative to other attractive lifestyle locations, such as Tauranga where the average value is now just over $720,000. That would suggest there is likely some additional headroom for further growth in Hawkes Bay.”
 
“We’re predicting more of the same in the coming months. The underlying drivers for the New Zealand economy remain positive. We have a strong labour market, there are still plenty of new people coming to live in New Zealand and interest rates remain close to historic lows. With the Reserve Bank anticipated to keep the OCR at 1.75% for the foreseeable future, we’re seeing banks offering very favourable lending rates provided buyers’ meet the set criteria. We’re expecting 2019 to be a year where value growth is not at the levels of the last few years but equally any value decreases are likely to be modest as demand still outstrips supply.”
 
Auckland
 
Value growth remains slow across Auckland's suburbs. North Shore values dropped 2.2% in the year to January and by 1.1% over the past three months. The average value there is now $1,202,443. The former Auckland City Council central suburbs dropped 0.9% year on year, however increased by 0.2% over the past three months and the average value there is now $1,234,033. Waitakere values decreased by 0.4% year on year and by 1.1% over the past three months. Manukau values decreased by 0.1% year on year although increased by 0.1% over the past three months; Papakura values decreased 0.6% year on year and by 0.7% over the last quarter and the average value there is now $696,144; Franklin values decreased 0.4% year on year and Rodney values were up 1.3% year on year.
 
QV Auckland Property Consultant, James Steele said, “The market remains relatively quiet although first home buyers remain active. Buyers are benefiting from some bargains although these tend to be properties which do not appeal to the owner occupier market and are often snapped up by those deal hunting investors left with good equity or borrowing capacity.”
 
“We are yet to see signs that the slight easing of LVR restrictions has stimulated market growth and instead is likely to promote stability as in 2018, however there is a general hesitance from buyers in the market due to uncertainty around changes in tax regulations. The introduction of anti-money laundering laws and difficulties bringing in offshore money is also believed to be impacting on buyer interest in above average price brackets.”
 
“On the supply side, we are seeing significant infill construction which is expected to continue based on the number of building consents currently being issued”.
 
Wellington
 
Values across the whole Wellington Region rose 7.9% in the year to January and increased 1.1% over the past quarter and the average value is now $693,448 Wellington City values increased 7.0% year on year and by 1.0% over the past three months and the average value there is now $817,944. Meanwhile, values in Upper Hutt rose 13.2% year on year and 5.3% over the past three months; Lower Hutt rose 9.0% year on year although decreased by 0.1% over the past quarter; Porirua rose 6.7% year on year and by 1.1% over the past quarter. Finally, the Kapiti Coast rose 6.7% year on year and 2.7% over the past three months.
 
QV Wellington Senior Consultant, David Cornford said, “Values continue to moderate across the Wellington region, with the exception of Upper Hutt which recorded a 5.3% value increase over the last three months. This locality provides greater affordability compared to Lower Hutt and Porirua, resulting in a significant amount of interest from first homebuyers and investors throughout the region.”
 
“In general, we’re certainly seeing the majority of value growth in the low-to-mid valued section of the market where first home buyer activity is significant. A range of policy changes, both announced and anticipated, are making property investors wary and first home buyers are enjoying slightly less competition from this segment of the market.”
 
“Stock levels remain low in Wellington and the biggest hand break on value growth is tight bank lending criteria, despite a slight easing of the Loan-to-Value Regions (LVR’s) in January. We’re also seeing more deals being conditional on finance or builders reports.”
 
“Despite this, there continues to be steady demand for property in Wellington and strong prices are still being achieved. Some pockets continue to see steady value growth, however overall, we are seeing a much more balanced market.”
 
Hamilton
 
Hamilton City home values increased by 0.3% over the past three months and by 5.9% in the year to January. The average value in Hamilton is now $577,352.
 
QV Hamilton Property Consultant Andrew Jaques said, “The market continues to move along steadily, supported by a high level of interest from first home buyers who are active in the $500,000-600,000 segment of the market.”
 
“There is still plenty of development going on, with plenty of house and land packages on offer, particularly in the northern suburbs (Flagstaff North, Rototuna), Western Suburbs (Rotokauri) and South (Fitzroy Development). These property packages appear to be selling well.”
 
Tauranga
 
Tauranga home values rose 3.3% year on year and by 2.0% over the past three months. The
average value in the city is $721,981. The Western Bay of Plenty market rose 5.5% year on year and 3.3% over the past three months. The average value in the district is now $651,073.
 
Christchurch
 
It’s a continuation of recent trends for Christchurch City, with value growth remaining modest. Values are slightly up year on year and also increased by 0.8% over the past three months. The average value in the city is now $497,370.
 
QV Christchurch Property Consultant Hamish Collins said, “It’s very much a buyers’ market at the moment, with plenty of supply giving them plenty of options to consider. There appears to be a good level of activity at open homes although we’re seeing some challenges around managing vendor high price expectations particularly for older stock. Overall, activity is steady, even though values remain flat.”
 
Dunedin
 
Dunedin residential property values are continuing to rise and have increased 11.1% in the year to January and 2.9% over the past three months. The average value in the city is $436,208. The Dunedin – Taieri area experienced strong value growth, up 13.3% annually and 4.2% over the past quarter.
 
Nelson
 
Nelson residential property values rose 9.2% in the year to January and by 3.2% over the past quarter. The average value in the city is now $609,985. Meanwhile, values in the Tasman District have also continued to rise, up 5.6% year on year and 1.4% over the past three months. The average value in the Tasman district is now $592,575
 
QV Nelson Property Consultant, Craig Russell said, “The market remains dynamic, with values up over the past three months. First home buyers continue to be active in the market with good demand up to $550,000 for well-located family homes.”
 
“Properties in traditional holiday locations, such as Mapua and Kaiteriteri, are generally more active over the summer months given the influx of holiday makers to the region.”
 
“This year is shaping up to be one influenced by low interest rates, central government legislation largely affecting investors and a continuation of a strong construction sector.”
 
Hawkes Bay
 
Napier values rose 11.3% year on year and by 4.3% over the past three months. The average value in the city is now $538,635. Hastings values are also continuing to rise up 11.2% year on year and 10.8% over the past three months. The average value there is now $504,553 .
 
QV Property Consultant Nicola Waldon said, “We continue to see an influx of out of town buyers, particularly from Auckland, which is helping keep up demand across the Hawkes Bay region. We’re also seeing plenty of demand from developers, who are looking to purchase and renovate property, with a view to selling on at a decent profit.”
 
“Overall, low levels of supply coupled with low interest rates continue to support strong value growth. We’re seeing that well-presented properties are selling quickly once they enter the market, which reflects how busy the market currently is.”
 
“The Hastings market is still very busy, particularly with first home buyers seeking property in the lower-valued suburbs such as Flaxmere, Camberley, Mahora, Mayfair and Akina.”
 
Provincial centres
 
In the North Island, Hastings, Wairoa and Stratford lead the way in quarterly growth, with value growth of 10.8%, 10.2% and 6.6% respectively. In terms of annual growth, Wairoa leads the way, up 32.8% followed by Kawerau (30.7%) and Tararua (22.4%)
 
In the South Island, Gore, Southland and Buller lead the way in quarterly growth, up 4.8%, 4.1% and 3.7% respectively. Invercargill leads the way in annual growth, up 12.2%, followed by Gore (9.2%) and Nelson (9.2%)
 
Annual Change in Values

For all media queries, please email our National Spokesperson Rory Milne on rory.milne@qv.co.nz or call 04 576 4434

*Please note, our partners CoreLogic have incorporated an improvement to the methodology in November 2018 which underpins the House Price Index figures. The change only concerns aggregated indices (i.e. where an index covers multiple Territorial Authorities).


This new methodology provides less volatility and a more precise measure of value changes. This change only impacts recent movements, with the historical series mostly not impacted. If you have any questions regarding the change, please get in touch with us by emailing communications@qv.co.nz

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