Property values continue to climb

Media release
13 January 2006

Property values continue to climb

Statistics released today by QV indicate that residential property values are still rising, with New Zealand residential properties growing in value by 15.8% over the 12 months to December, up from 15% annual growth to November.

The national property value growth rate reported by QV to December was the highest for 2005, reflecting that the residential market is continuing to remain upbeat.

“We are still seeing increasing levels of growth in property values across most areas of the country, particularly in regional areas which continue to offer affordable housing and investment options” says QV spokesperson Glenda Whitehead.

Across the main centres Hamilton (26.9%) continued to display strong growth, and was followed by Christchurch (20.2%), and Wellington (12.9%). Property values were up by 12.2% in Dunedin, while in Auckland City (7.9%) property values increased by their highest reported growth rate in 2005.

The increase in property values also remained strong across the provincial cities, with Whangarei (31.4%), Rotorua (29.3%), Gisborne (26.8%), and New Plymouth (25.6%) leading the way.

ENDS

Main Urban Areas Commentary:

Auckland:

Auckland City property values increased 7.9% over the 12 months to December, up from 4% growth to November. Continued strong demand at lower end of the market is reflected in a growth level of 10.7% in the Southern Suburbs, where prices remain the most affordable in Auckland City.

Property values were up 12.2% in Waitakere, a very similar growth level to that reported in January 2005 (12.1%), which reaffirms reports from valuers that property value growth appears to have stabilised across a number of areas in Waitakere.

In Manukau (13.9% growth) there is still strong interest from the developer, investor, and first home buyer markets, which is helping sustain the upwards trend in property value growth seen in the area over the past year.

Hamilton:

Property values in Hamilton increased 26.9% over the 12 months to December, while the average sale price ($295,630) edged closer to $300,000.

Property values in all areas of Hamilton increased above 22% annual growth, while South Western suburbs continued to have the highest level of growth (28.6%) and the lowest average sale price ($273,194). Affordability continues to be a key factor in the market remaining buoyant.

Although property values in Hamilton continue to grow in excess of other main centres, growth rates in all areas of Hamilton eased slightly from the figures reported by QV in November.

Wellington:

The Wellington City residential market has continued to go from strength to strength, with property values increasing 12.9% annually to December, the highest level of growth reported for Wellington City in 2005.

Properties in the Northern Suburbs grew in value by 15.5%, followed by the Eastern Suburbs (12.7%), Central and Southern Suburbs (11.4%), and Western Suburbs (10.2%).

Residential properties in Lower Hutt grew in value by 12.9% with an average price of $284,738, while properties in Upper Hutt were up 16.9% with an average price of $263,746.

Christchurch:

The residential market in Christchurch is continuing to perform at a steady pace, with property values increasing 20.2% annually to December, with an average sale price of $301,764. Like a number of other main centres, the property value growth level in Christchurch was the highest reported for the area in 2005, which has experienced a steady upward trend in property value growth in 2005.

All areas of the Christchurch market appear to be doing well as values are increasing at similar levels between areas: Christchurch East (21.1%), Central City/Northern areas (20.5%), Southwest (20.2%), and Hills (17.1%).

Dunedin:

Dunedin City properties increased in value by 12.2% to December, with an average price of $250,239. Although the property value growth rate was close to the national average, the growth rate in Dunedin has consistently eased from 23.2% reported in September 2005.

Southern areas of Dunedin City continue to remain the most buoyant areas of the market, with 14.9% growth and an average price of $238,105, while property value growth in Taieri was close behind on 13.2% with a higher average price of $256,733.
QV RESIDENTIAL PRICE MOVEMENT REPORT - as at December 2005

City / Region December 2005 Property Value Growth % November 2005 Property Value Growth % December 2005 Average sale price
(Annual % change) (Annual % change)
Far North 22.1 28.3 $266,140
Whangarei 31.4 34.5 $283,663
Kaipara 34 32.8 $216,592
Rodney 9.9 10.1 $443,445
- Hibiscus Coast 9.9 10.2 $451,147
- Rodney (North) 11.6 10.8 $430,484
North Shore City (A) # 13.7 13.6 $481,894
- Coastal North Shore 13.4 13.5 $544,428
- North Shore Onewa 13.8 13.1 $398,202
- North Harbour 9.3 10 $494,959
Waitakere City (A) # 12.2 12.2 $350,981
Auckland City (A) # 7.9 4 $498,337
- Auckland City (Central) 5.5 1 $470,195
- Auckland City (East) 7.6 3.1 $612,911
- Auckland City (South) 10.7 8.5 $431,478
- Islands -3.3 -1.7 $493,810
Manukau City (A) # 13.9 13.9 $357,471
- Manukau East 11.5 10.4 $462,825
- Manukau Central 18.1 17.1 $288,487
- Manukau North West 15.1 17.3 $313,675
Papakura (A) # 17.1 17.5 $299,034
Franklin 19.2 23.9 $341,303
Thames Coromandel 15.4 13 $404,077
Hauraki 31.8 33.9 $200,261
Waikato 31.4 26.4 $218,331
Matamata Piako 33.7 35.9 $228,601
Hamilton # 26.9 27.7 $295,630
- Hamilton North East 22.8 25.1 $357,610
- Central City/North West 27 28 $287,379
- Hamilton South East 26.6 27.7 $277,260
- Hamilton South West 28.6 30.9 $273,194
Waipa 27.5 28.1 $267,390
Otorohanga 54.5 54.1 $188,258
South Waikato 40.3 44.8 $100,903
Waitomo 24.2 30.7 $123,016
Taupo 11.4 13.1 $347,246
Western Bay of Plenty 31.2 29.2 $362,014
Tauranga # 13.5 6.8 $376,976
Rotorua 29.3 27.7 $218,724
Whakatane 29.3 42.5 $272,536
Kawerau 49.4 42.5 $117,500
Opotiki 31.2 70.8 $171,472
Gisborne 26.8 28.4 $207,294
Wairoa 53.1 51.6 $115,097
Hastings 16.9 19.9 $284,204
Napier City # 12.6 13.3 $306,860
Central Hawkes Bay 27.1 30.9 $203,643
New Plymouth 25.6 24.9 $280,262
Stratford 43.4 38.4 $145,131
South Taranaki 34 37.7 $144,218
Ruapehu 42.6 43.6 $108,570
Wanganui 34 38.3 $158,946
Rangitikei 35.8 37.5 $121,476
Manawatu 28.2 27.3 $199,567
Palmerston North # 20.9 18.3 $241,075
Tararua 22.6 20.8 $104,880
Horowhenua 25.5 26.8 $174,445
Kapiti Coast 18.1 16.5 $283,442
Porirua (W) # 15.8 15.5 $307,928
Upper Hutt (W) # 16.9 15.6 $263,746
Lower Hutt (W) # 12.9 13.2 $284,738
Wellington City (W) # 12.9 12 $413,847
- Wellington City & Southern Suburbs 11.4 10.1 $418,158
- Eastern Suburbs 12.7 12.4 $445,694
- North Wellington 15.5 14.3 $370,966
- Western Suburbs 10.2 11.3 $475,343
Masterton 17.2 18.2 $196,269
Carterton 15.4 11.8 $180,837
South Wairarapa 20.1 19.9 $232,475
Tasman 7.9 5.9 $317,765
Nelson # 4.9 3.9 $308,820
Marlborough 17.8 14.9 $282,043
Kaikoura 12 8.2 $319,594
Buller 27.2 25.7 $147,481
Grey 31.6 29.6 $164,590
Westland 35.3 37.5 $220,587
Hurunui 18.2 22.4 $234,539
Waimakariri 20.5 19.8 $279,483
Christchurch City # 20.2 19.3 $301,764
- East 21.1 20.9 $257,128
- Hills 17.1 17.7 $437,240
- Central City and North 20.5 17.7 $355,340
- Southwest 20.2 20.7 $279,535
Banks Peninsula 21.1 16.4 $329,834
Selwyn N/A N/A N/A
Ashburton N/A N/A N/A
Timaru 24.5 23.6 $192,143
MacKenzie 23 12.7 $210,862
Waimate 18.9 13.8 $133,471
Waitaki 11.7 10.5 $154,250
Central Otago 14.3 13.2 $261,631
Queenstown Lakes 13.5 12.8 $509,823
Dunedin # 12.2 13.9 $250,239
- Central/Northern City 10.6 11.7 $259,412
- Peninsular/Coastal Dunedin 10.3 13.2 $234,659
- Southern City 14.9 17.5 $238,105
- Taieri 13.2 16.7 $256,733
Clutha 37.7 41.1 $126,046
Southland 18.5 16.4 $149,983
Gore 8.7 8.3 $109,387
Invercargill # 15.1 10.1 $143,192

Total NZ 15.8 15 $315,249

Auckland Region (A) 11 9.1 $419,000
Wellington Region (W) 13.6 13.1 $344,389
Main Urban Areas # 13 11.9 $352,810

Notes on the above data:

If a City or Region is shown in italics with an * this indicates the values for this area may not be statistically accurate as they are based on a low volume of sales.
N/A - indicates that either there were too few sales to report a Property Value Growth % or that the data for this period was unavailable

The information included in the above table is calculated based on the sales data entered into QV's system for the previous 3 month period. For example, information for the period ending June will be calculated based on sales entered between April 1 and June 30.

Property Value Growth is the annual % change in residential property values, calculated using QV's House Price Index methodology. The residential sales entered into QV's system for the previous 3 month period are compared to the same period of the previous year to identify the annual percentage change in residential property values. Average sale prices are calculated based on residential sales entered into QV's system for the previous 3 month period.

Residential Price Movement
Questions and Answers:

The following information is provided as background to the Residential Price Movement statistics.

1. What is the Residential Price Movement Report?

The Residential Price Movement Report is a new set of residential property statistics that provides an estimate of the change in residential property values over the previous 12 months for areas throughout New Zealand. Residential sales compiled by QV for the previous 3 months are compared to the same period of the previous year to identify the annual percentage change in residential property values. The residential sales included are for residential houses, apartments, flats, home and income properties, and houses converted to flats.

2. Why has the Residential Price Movement Report been developed?

The Residential Price Movement Report has been developed to provide a timely indicator of residential property value movement, using the latest residential sales data compiled by QV for the previous 3 month period.

QV has previously only released property statistics quarterly. QV’s measure of price movement has been the Quarterly House Price Index (QHPI). The QHPI only includes sales that have been notified to the Territorial Authority that sold within the quarter. As sales of properties can sometimes take 4-6 weeks to settle, the QHPI is released after an extended period to incorporate as much sales activity from the quarter, which results in increased statistical accuracy, but also a less timely output.

As the Residential Price Movement Report uses the sales compiled by QV over a 3 month period, rather than the sales that necessarily sold within that period, the Residential Price Movement Report can be released on a more frequent basis, providing a timelier indicator of property value movement. The Residential Price Movement Report also includes sales activity in other residential property sectors including apartments and flats.

3. How frequently will the Residential Price Movement Report be released?

The Residential Price Movement Report data will be available to the media on a monthly basis. It will be released to the media for publication on either the second or third Monday of each month.

4. How current is the Residential Price Movement data?

The data contained in the Residential Price Movement Report is based on the residential sales compiled by QV for the previous 3 month period.

For example, the Residential Price Movement Report as at January 2005 will include sales compiled by QV up until 31 January 2005 and include sales compiled since 1 November 2004.

5. Why does the Residential Price Movement Report include sales compiled by QV over a 3 month period?

Sales are included over a 3 month period rather than a single month to ensure that there are sufficient sales volumes to calculate statistically accurate property value growth.

6. How is the Residential Price Movement data calculated?

The Residential Price Movement Report includes two indicators of property value; the property value growth, and average sales prices.

Property Value Growth
The Property Value Growth uses QV’s House Price Index methodology, which generates a residential index for each area by recognising the sales price of each property sold compared to its capital value. This ensures the index provides a measure of change in property values, without fluctuations caused by higher sales volumes in one or more property sectors (e.g. high volumes of apartment sales or investment properties).

Residential sales compiled by QV for the previous 3 month period are compared to the sales compiled by QV for the same period the previous year to identify the annual percentage change in property values.

Average Sales Prices
The Average Sales Prices calculated in the Residential Price Movement Report are based on residential sales compiled by QV for the previous 3 month period.

7. Does property value growth reflect a change in average sales prices?

No. Property Value Growth does not reflect a change in average sales prices, which are only given to enable a comparison of sale prices for one month compared to the last. Property Value Growth uses QV’s House Price Index methodology to generate a residential index for each area by recognising the sales price of each property sold compared to its capital value.

8. Why does QV recommend using the Property Value Growth rather than Average Sales Prices to verify the change in property values over time?

Average Sales Prices are only provided in the Residential Price Movement Report as a broad indicator of property values in an area to assist comparisons between areas. QV recommends referring to the property value growth to verify change in property values over time, rather than the average sales price, as the average sales prices can be impacted by the types and categories of properties selling, or low volumes of property sales.

9. When was the Residential Price Movement Report first released?

The Residential Price Movement Report was first released for the period ending January 31 2005. The QV Quarterly House Price Index, which measures the movement of house values over time, is available back until 1989. QV is also able to produce statistics using its database going back to 1985 for most areas.

10. Why does the Residential Price Movement Report provide an ‘estimate of property value’ only?

Data in the Residential Price Movement Report provides estimates only of property value, and should not be considered ‘final’ statistics, as not all sales for the 3 month period will be included due to the time the data is released. This is because some sales within the 3 month period will not have been notified to the Territorial Authority in time for inclusion in the Residential Price Movement Report data. Notification of the sale to the Territorial Authority does not occur until after the sale has been settled and documents forwarded by the solicitor. This generally introduces a lag of 4 to 6 weeks before the Territorial Authority records the sale.

QV produces final property statistics which are released after an extended period to incorporate a greater level of sales activity, resulting in a more statistically accurate output. Final property statistics, including the QV Quarterly House Price Index, can be purchased online at www.qv.co.nz.

11. Why do some Territorial Authorities show ‘N/A’ (Not Available)?

Territorial authorities may show ‘N/A’ if there is insufficient data available at the time of publication to produce statistically accurate outputs. This may occur when there has been very low sales activity in an area, or alternatively when QV has not been supplied sufficient residential sales volumes by a Territorial Authority for a particular period.

12. Why does QV caution against using statistics with low volumes of sales?

Statistics based on low sales volumes should be used with caution, as low volumes of sales are insufficient to create statistically accurate outputs. Any statistics calculated based on sales volumes of less than 50 sales appear in Italics in the Residential Price Movement Report data.

13. How are the regions and city areas defined?

Property Value Growth statistics are provided for each council area throughout New Zealand. Five main urban areas (Auckland, Hamilton, Wellington, Christchurch, and Dunedin) also have property value growth statistics available for areas within the cities. These city areas have been defined through consultation with QV Valuers that have local knowledge of each area.

Property Value Growth Statistics are not provided for individual suburbs, as most suburbs have insufficient sales volumes to ensure statistically accurate property value growth calculations.

14. Where does QV source the property data?

QV maintains a national database on Property Information that it creates by sourcing updates of the District Valuation Roll from all NZ Territorial Local Authorities/councils.

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