The latest QV House Price Index data for December shows the property market has finished the year with a show of strength, with all the 16 major cities we monitor showing quarterly value growth. This is the first time this has occurred since November 2018.
The average value nationally has increased 4.0% year on year and is now $710,129. This represents an increase of 2.7% over the past three months. The average value in the Auckland Region sits at $1,047,110, up 1.9% over the last quarter, but down slightly by 0.1% year on year.
QV General Manager David Nagel said “Affordability has been a continuing issue for buyers throughout 2019 due to the unprecedented value growth over the past five years. But a combination of record low interest rates, as well as a shortage of property listings has created a welcomed boost to value levels for vendors as the year closed out”.
“The regions have continued to thrive throughout 2019 while the markets of the main centres lost steam. But even the main centres have shown renewed strength in the past two months”. “The Auckland area has for the second consecutive month experienced quarterly value growth in all the legacy council districts”, says Mr Nagel.
“Financial providers are reporting renewed interest from existing property owners looking to restructure their financial position to enable the purchase of an additional property”, says Mr Nagel. “First home buyers also appear to have adopted the sentiment that the timing isn’t going to get any better in the short term to enter the property market”, he says.
“This means we have multiple buyers looking to purchase a limited number of properties, particularly at the less expensive end of the market. While affordability is still a concern for buyers, this is offset partially by the low interest rates, which appear to be here to stay for the medium term”, he says.
“Looking towards 2020, we will likely see a continuation of modest but steady value growth throughout most of New Zealand, at least until some of the new stock currently under construction comes on stream. But the property market hates uncertainty and with a general election looming later this year and no clear outcome on the horizon, housing policy will be key as we head towards the final quarter of 2020”.
A full breakdown of the QV House Price Index figures for December 2019 is available by clicking here
North Shore values dropped -0.9% in the year to December but rose by 2.4% over the past three months. The average value there is now $1,201,420. The former Auckland City Council central suburbs increased 0.9% year on year and 2.4% over the past three months and the average value there is now $1,244,959.
Waitakere values dropped by 0.2% year on year, rising 1.0% over the past three months. Manukau values decreased by 0.5% year on year, rising 1.8% over the past three months; Papakura values increased 2.1% year on year and 2.8% over the last quarter and the average value there is now $716,121; Franklin values increased by 0.5% year on year and Rodney values were down 0.7% year on year.
The Auckland market rebounded for a relatively strong finish to 2019 after a downbeat first half of the year off the back of some uncertainty around government policy and the effect of the foreign buyer ban. QV Senior Consultant Rupert Yortt says, “The latest QV House Price Index figures indicate a slight lift in values across most areas with talking points going into the holiday break being a lack of listings and an increase in competitive situations for buyers. This led to good prices being achieved and a noticeable return of investors into some areas of the market.”
“The Central suburbs of Ponsonby, Grey Lynn and Westmere performed particularly well toward the latter part of the year while most of the North Shore had a slightly tougher 2019 than areas South of the bridge. However, the North Shore did also see some positive sentiment returning for the last quarter of 2019 with well presented properties still attracting good prices. South Auckland followed a similar trend with a subdued start before some positive signs heading into the 2020. Greenfield developments around Auckland tended to struggle slightly more than the established areas with reasonable amounts of supply available for buyers” says Mr Yortt.
Hugh Robson, QV Senior Consultant noted “Demand for large sites throughout the region increased as developers looked to make the most of the Unitary plan changes. In Western areas, commercial hubs such as New Lynn, Henderson and Avondale were popular for this in 2019”.
Overall, says Mr Yortt, the rental market appears to have strengthened over 2019 with anecdotal evidence suggesting increased levels of demand for well-located properties and as well as some minor rental price increases being noted.
Hamilton City home values increased by 2.3% over the past three months and increased by 5.8% in the year to December 2019. The average value in Hamilton is now $604,034.
Jarrod Hedley, QV Senior Consultant says “Grandview Heights had the highest 12 month change in values up 7.6% whilst Queenwood had the lowest at only 1%. Regionally all districts showed similar increases between 4-8% for 2019 with the exception being Otorohanga increasing 29% now up to $381,820. Thames Coromandel continues to have the highest median price for the region at $778,319”.
Modest value growth was seen in Tauranga with values increasing by 2.1% over the last quarter. The average value is now $763,422 up 5.9% year on year.
Values across the whole Wellington Region rose 5.3% in the year to December and increased 3.5% over the past quarter and the average value is now $856,272. Porirua has lead the way in recent months with an increase of 6.6% over the quarter and an average value of $652,213.
The second half of 2019 finished strongly with values throughout the region continuing to rise. David Conford, QV Senior Consultant says “The value increase over 2019 was supported by low interest rates, limited stock and strong buyer demand across most segments of the market.
“First home buyers continued to have a strong presence in the market throughout 2019 and the latter half of 2019 saw increased activity from investors” he says. A considerable number of townhouses were constructed throughout the region over the year and these have sold extremely well with demand continuing to outweigh supply.
A shortage or rental accommodation combined with population growth saw rents move higher over 2019. “There was, and continues to be a severe shortage of rental accommodation in Wellington and many people struggled to secure accommodation in 2019” says Mr Conford.
“Looking forward to 2020, the key drivers - low interest rates, population growth and a relatively strong economy remain similar. Based on these drivers, we can expect a robust market in the first half of 2020 with upwards pressure on values likely to continue.”
Mr Conford expects new listings will be few and far between until after Wellington anniversary weekend when most people will be back after the holiday period. “New stock will come to the market over February and March in greater numbers however demand is expected to exceed supply and stock levels are likely to remain constrained, as they were in 2019”.
Nelson / Tasman
Nelson residential property values rose 6.2% in the year to December and 1.5% over the past quarter. The average value in the city is now $638,842. Meanwhile, values in the Tasman District have also continued to rise, up 4.4% year on year and 1.1% over the past three months. The average value in the Tasman district is now $615,286.
QV Senior Consultant Craig Russell, says “The Nelson property market was robust throughout 2019 with moderate house price growth fuelled by low interest rates demand outstripping supply. Values continue to increase at a modest but steady rate with low interest rates encouraging house price growth.
As typical for December, market activity this year was limited. However at this time of year it is common to see an increase in market activity and presence at open homes in holiday hotspots such as Mapua and Kaiteriteri.
The Christchurch market remains relatively steady with growth of 2.3% recorded year on year to December 2019, and 2.1% over the previous 3 months says QV Senior Consultant Kris Rogers. The average value across the city is now $507,852.
Much of this annual growth in Christchurch has been driven by stronger sales in Sumner, the Hill suburbs and on the peninsula. The Christchurch suburbs that have experienced the greatest value increases year on year to December include; Sumner (6.8%), Scarborough (6.5%), Charteris Bay (5.6%), Cashmere (5.4%) and Clifton (5.0%). Akaroa and Duvauchelle have experienced the greatest growth in the Christchurch City District with 11.6% and 9.2% growth year on year respectively.
The Waimakariri and Selwyn districts remain stable with modest growth year on year to December 2019. Waimakariri district recording an increase of 1.8% and Selwyn 0.6%. The average value of a residential property in the Selwyn district is $558,645, whilst the Waimakariri District is now $456,265.
Dunedin residential property values rose 18.3% in the year to December 2019 and by 8.7% in the past three months. The average house value in the city is now $514,645.
The Dunedin market has been the leading performer of the main centres throughout 2019. This has been driven primarily by an abundance of affordable housing, coupled with steady demand from investors and first home buyers. While the market growth appeared to wane in the middle of 2019, it has finished the year very strongly as evidenced by the quarterly growth.
Provincial centres, North Island
Ruapehu leads the way in quarterly growth, up 14.3%, followed by Whanganui 13.8 and Rangitikei 12.4%. In terms of annual growth, Otorohanga leads the way, up 29.4%, followed by Rangitikei 24.4% and Ruapehu (21.7%).
Provincial centres, South Island
Southland leads the South Island in quarterly growth, up 9.0%, followed by Dunedin 8.7% and Clutha 8.3%. Clutha leads the way in annual growth, up 21.8%, followed by Southland 19.0% and Dunedin 18.4%.
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