The latest QV House Price Index data for February shows the property market is continuing to perform strongly with all 16 of the major cities we monitor showing quarterly value growth. This is the third consecutive month this has occurred, indicating strength right across the country.
The average value nationally has increased 5.3% year on year and is now $722,475. This represents an increase of 2.6% over the past three months, slightly up from last month. The average value in the Auckland Region sits at $1,057,556, up 1.8% over the last quarter, and up 1.2% year on year.
QV General Manager David Nagel said “February data confirms that strength is returning to the Auckland market after a relatively quiet 2-3 years. Sales activity has picked up significantly in Auckland as well as around most parts of the country as more buyers are committing to property decisions in an already congested market. As a consequence we’re seeing more buyers from across the property spectrum competing for limited stock which is forcing prices to rise”.
“This a pattern likely to continue as we enter autumn, where typically the summer rush of property listings drops off and an already tight market gets even more tightly held. This will only deepen the imbalance between demand and supply.”
"Apprehension around COVID 19 and the impacts this might have on the economy are unlikely to be felt in the property market in the short term, but could have impacts in the months ahead. Locations dependent on tourism are likely to be first to feel the pinch" says Mr Nagel.
"If we see a reduction in the OCR by the Reserve Bank in response to the COVID 19 outbreak, then this could actually stimulate the property market further in the short term, depending on the extent of interest rate reductions that are passed onto borrowers."
“Of the main centres, the Wellington region has usurped Dunedin this month with quarterly value growth of 5.4%, but Dunedin remains with quarterly growth of 4.9%. Dunedin has recorded annual value growth of 18.1% which is still well ahead of the other main centres with the Wellington region a distant second at 10.8% annual growth”, says Mr Nagel.
“The resurgence observed in Christchurch last month continues with 1.5% value growth in the past three months and 3.5% year on year growth. Hamilton is also showing renewed strength with quarterly value growth of 4.3% reflected in year-on-year growth of 7.3%”, he says.
Of the smaller cities, Whanganui and Gisborne remain the top North Island performers recording annual value growth of 29.1% and 24.9% respectively. Invercargill leads the way in the South Island with annual growth of 19.3%.
For the regions, the central North Island locations of Rangitieki, Tararua and Kawarau experienced annual value growth ranging between 22-32%, while Clutha District recorded the strongest annual value growth in the South Island at 17.2%.
Continued levels of steady growth are apparent in the Auckland market with positivity noted throughout the region. “Auctions are once again delivering good results and wider economic threats are yet to make an impact on the housing market as the surge over summer continues”, says QV Senior Consultant Rupert Yortt.
The market out West continues to be active. Agents are reporting a shortage of listings in most suburbs. Areas such as Te Atatu Peninsula, New Lynn and Avondale are very popular with strong demand noted. QV Senior Consultant Hugh Robson says “The new Unitary Plan is really kicking in now. Many original homes on spacious sites are being moved off site to make way for new more intensive developments. New subdivisions in Hobsonville, Whenuapai and Kumeu continue to progress well. New houses, renovated properties and well located properties are selling quickly.”
Mr Robson also notes that rental levels in West Auckland have increased moderately over the past 4-6 months.
Central city west suburbs have seen continued value growth and activity. Grey Lynn, Westmere, Pt Chevalier, Mt Albert and Mt Eden are selling well with prices increasing steadily. “Several new apartment blocks are currently under construction in these areas, with good demand noted by agents.” says Mr Robson.
“In South Auckland, typically undesirable properties are again starting to sell indicating positivity whilst ‘off the plans’ purchases, which have slowed over the past year are also starting to pick-up.” Mr Yortt is seeing first home buyers continue to be active throughout the lower value areas.
“Over on the North Shore”, notes Mr Yortt, “similar trends have been observed, where there have been instances of auctions being brought forward and development sites once again attracting good levels of interest. Traditionally popular areas such as Forrest Hill, Milford and Takapuna are starting to see indications of the market warming up.”
Hamilton City home values increased by 4.3% over the past three months and increased by 7.3% in the year to February 2020.
Sales across Hamilton were down for February after a strong start to the year, with only 402 sales occurring in the city, compared with the 512 recorded in January. The average median price is steady up 1% for February to $622,492.
Jarrod Hedley, QV Senior Consultant says “Cambridge, Te Awamutu and Morrinsville continue to have healthy sale volumes as the main market continues to push out past Hamilton City, in search for good quality properties. These, as well as other satellite locations will continue to benefit from ongoing local development, enticing buyers into newer properties as they readily become available.”
“The Waipa District in particular, which recorded an average median price of $626,088 for February, up 2.2%, demonstrates the demand for newer stock in these locations being seen as more affordable and/or a better investment decision when compared with older housing stock in alternative areas”, says Mr Hedley.
Modest value growth was seen in Tauranga with values increasing by 1.0% over the last quarter and 5.9% over the last 12 months. The average value is now $768,178.
Values across the whole Wellington Region rose 7.9% in the year to February 2020 and increased 4.9% over the past quarter and the average value is now $888,874. Upper Hutt showed growth of 14.9% in the past 12 months and now has an average value of $621,351. Hutt Valley grew 16.1% in the 12 months to February 2020 and now has an average value of $667,034.
Despite the downturn in global economic confidence due to COVID 19, there has been no notable impact on the residential property market in the Wellington region says QV Senior Consultant David Cornford. “It is quite possible we may see a softening of the residential market over the coming months as a result of a slower economy due to Covid 19 but presently we are not seeing this flow through. Record prices are being achieved and there is still plenty of demand particularly at the entry level of the market.”
The majority of properties at the entry to mid end of the market are selling quickly and often under multi-offer situations. “First home buyers are very motivated to secure a property of their own due to the high cost of renting in the Wellington region and fear of missing out due to rising prices” says Mr Cornford.
“Buyers from Wellington City continue to look further afield for their first homes to areas such as Wainuiomata, Taita, Naenae, Stokes Valley, Upper Hutt and Porirua. These areas were largely overlooked by this buyer group five years ago and we have seen values increase strongly in these areas since late 2015 as a result.”
A lack of stock, low interest rates and strong buyer demand continue to support the market.
Nelson / Tasman
Nelson residential property values rose 6.8% in the year to February 2020 and 2.5% over the past quarter. The average value in the city is now $653,576. Meanwhile, values in the Tasman District have also continued to rise, up 4.1% year on year and 0.5% over the past three months. The average value in the Tasman district is now $623,416.
The residential market saw moderate value growth in the top of the South, starting 2020 with demand for housing exceeding supply. QV Senior Consultant Craig Russell says that in recent times, inventory has been steadily falling with fewer properties creating increased competition. “Properties in excess of $1,200,000 are have a limited buyer pool and are sitting on the market for an extended period of time”, he says. “Demand is currently greatest for properties up to $550,000 with investors and first home buyers generally vying for these properties.”
“Given the region’s reliance on exporting and tourism, the longer the Corona Virus plays out the more likely there will be some impact on the property market. At this stage there has been no discernible impact on the local residential property market.”
Christchurch residential property values continue to remain relatively stable increasing 3.5% year on year to February 2020 and 1.5% in the past three months. The average value of a residential property in Christchurch now sits at $512,442.
QV Senior Consultant Kris Rogers notes that the Christchurch residential property market has experienced a relatively positive start to 2020 with first home buyers leading the charge. “There are fewer listings on the market compared to this time last year and this reduction in supply coupled with favourable lending rates is placing upward pressure on values” he says.
“Strong sales on the hill suburbs in Christchurch have continued in the early part of 2020 with the average value on the hills now being $710,817, representing an increase of 6.8% over the last 12 months.”
The Waimakariri and Selwyn districts remain stable with modest growth year on year to February 2019 with Waimakariri district recording an increase of 2.3% and Selwyn 1.2%. The average value of a residential property in the Selwyn district is $560,945, with the Waimakariri District now $460,525.
Dunedin residential property values rose 18.1% in the year to February 2020 and by 4.9% in the past three months.
QV Property Consultant Tim Gibson says the Dunedin City residential property market remains buoyant with average house prices once again showing increases across all main areas. “Properties in the lower to medium price brackets are attracting a high level of demand from a wide range of buyer groups.”
The average house price in Dunedin City is now $530,262 which is slightly up from the January average house price of $527,101.
Provincial centres, North Island
Kawerau continues to lead the way in quarterly growth, up 19.1%, followed by Opotiki 8.9% and Rangitikei 8.7%. In annual growth, Rangitikei leads the way, up 31.9%, followed by Whanganui 29.1% and Manawatu (25.7%).
Provincial centres, South Island
Waimate leads the South Island in quarterly growth, up 7.4%, followed by Dunedin South 6.2% and Grey District 5.4%. Dunedin Peninsular leads the way in annual growth, up 21.4%, followed by Invercargill 19.3% and Dunedin South 18.7%.
Annual change in values
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