Residential Property Increases 9.4%

Residential Property Increases 9.4%

QV’s November statistics released today show national growth in residential property values of 9.4% over the past year (calculated over the three months ending November 2006 in comparison to the same period last year). The growth rate is marginally slower than the 9.6% reported in October. The average New Zealand sale price over the period was $347,005.

“Although property values across the country are continuing to increase, the rate of growth has been easing throughout 2006” said QV spokesperson Blue Hancock. “However, the spring property market has seen a number of areas bounce back. Some of the early runners in the market are increasing in value at a faster rate than last month. Queenstown Lakes increased growth from 1.3% in October to 4.6% in November, Tauranga 1.6% to 3.4%, Tasman 8% to 9.1% and Auckland region from 7.3% to 7.6%”.

Trends across the main centres varied with Auckland City up to 7.2% and Dunedin up to 4.6%. Wellington remained consistent at 9.8% while Christchurch eased to 9% and Hamilton to 8.7%.

The trends in provincial cities were similar to the main urban areas with some cities showing slight increases while others continued to slow. Mr Hancock attributed patterns to a normal activity associated with the spring property market.

Main Urban Areas Commentary:

Auckland:

Property values across the Auckland region increased by 7.6% (calculated over the three months ending November 2006 in comparison to the same period last year), up from 7.3% reported for the period ending October. The average sale price across Auckland was $446,609.

“Property prices across the wider Auckland region have continued their steady path of recent months, with the growth rates among various cities and districts moving slightly from what we reported last month” said Glenda Whitehead of QV Valuations. “Rodney has shown the largest increase in the region, with growth now back to the levels reported in February and March of this year (9.4% annual growth). Auckland City also showed a further increase to 7.2% while North Shore has been relatively static at 5.9%, although with strong buyer interest. Waitakere’s growth is also stable at 6.8%”.

“Franklin has showed the biggest slowdown in property growth from 7% last month to 5.4%. However, valuers working in the southern Auckland areas report lots of activity at the lower end of the market” said Glenda Whitehead. “As reported previously, buyers continue to be cautious with affordability still a strong influencing factor. The easing of bank lending policies may be helping the first home buyers into the market and be keeping the lower end of the market active”.

Hamilton:

Hamilton’s property values grew by 8.7% (calculated over the three months ending November 2006 in comparison to the same period last year), down from 9.9% as reported in October. The average sale price for Hamilton City was $320,215.

“Demand for residential property and the rate of growth in property values continued to ease across all parts of Hamilton in November. This is the twelfth consecutive month that has showed a decrease in the growth rate for Hamilton City” said Richard Allen of QV Valuations.

“Although sales activity and growth have eased quite substantially, the average sale price in Hamilton continued to hover around $320,000. Expectations are that sales activity will pick up in December 2006 and January 2007. However, we are unlikely to see significant growth in sale prices” said Mr Allen.

Wellington:

Wellington City’s residential property values increased by 9.8% over the past year (calculated over the three months ending November 2006 in comparison to the same period last year). This is the same growth rate reported in October. The average sale price in Wellington City was $463,453.

“Other areas across the Wellington region are on the rise, with Upper Hutt and Lower Hutt growing at 16.5%, and all areas showing strong price increases” said Max Meyers of QV Valuations. “The region’s property price increases are still buoyant with the city and southern suburbs having the lowest reported increases, but still at a very healthy 7.6% over the past year. Outlook is for an active market during summer with price increases persisting in most areas”.

Christchurch:

Residential properties in Christchurch increased in value by 9% (calculated over the three months ending November 2006 in comparison to the same period last year), down from the 9.5% experienced in October. The city’s average sale price was $328,873.

“While the growth has slowed, it has been gradual and reflective of a soft landing for the property market. The average sale price has been hovering around $320,000 to $330,000 for the past nine months, which indicates a steady market” said Mark Dow of QV Valuations. “Spring has helped to rekindle interest in property and this is reflected in the activity levels rather than price levels for most types of residential property”.

Dunedin:

Dunedin residential property values increased by 4.6% (calculated over the three months ending November 2006 in comparison to the same period last year), up from 4.1% last month. The average sale price in Dunedin was $261,799.

“We now have a situation where the supply of housing stocks on the market is more in tune with the demand from buyers. Vendors are becoming more realistic with asking prices and buyers are not forced into making unreasonably high offers to beat off the competition” said David Paterson of QV Valuations.

“Indications are that there is still reasonable demand in the $200,000 - $300,000 price range, but not so strong for the market over $500,000. QV’s latest statistics show that 75% of residential sales fall within the $100,000 to $300,000 range” said Mr Paterson.

Tauranga:

Tauranga property values have grown by 3.4% over the past year (calculated over the three months ending November 2006 in comparison to the same period last year), up from 1.6% reported in October. The city’s average sale price was $405,638.

“The spring property market has seen an increase in the number of properties selling, however sales numbers are still significantly lower than the same period last year” said Christopher Boyd of QV Valuations. “However, it’s encouraging to see Tauranga property values increasing at a higher rate over the last 2 months, reversing the trend of the 8 months prior to October where the rate of increase in property values had been easing. The average sale price increased to $405,638, which is another new high for the Tauranga property market”.

QV RESIDENTIAL PRICE MOVEMENT REPORT - as at November 2006

City / Region November 2006 Property Value Growth % October 2006 Property Value Growth % November 2006 Average sale price
(Annual % Change) (Annual % Change)
Far North 13.6 15.5 $328,841
Whangarei 9.7 12.3 $314,268
Kaipara 18.6 33.4 $268,553
Rodney 9.4 8.2 $483,745
- Hibiscus Coast 7.2 7 $485,635
- Rodney (North) 13.2 10.3 $480,649
North Shore City (A) # 5.9 5.6 $532,208
- Coastal North Shore 5.8 5.2 $609,826
- North Shore Onewa 6.2 5.8 $435,330
- North Harbour 6.4 6.2 $534,026
Waitakere City (A) # 6.8 7 $365,878
Auckland City (A) # 7.2 6.5 $511,145
- Auckland City (Central) 2.7 3 $482,396
- Auckland City (East) 7.6 7 $627,890
- Auckland City (South) 6.9 5.9 $443,012
- Islands 13.3 14.7 $497,077
Manukau City (A) # 10.4 10.7 $382,364
- Manukau East 9 9.5 $487,432
- Manukau Central 10.8 12 $316,797
- Manukau North West 12.8 12.4 $343,019
Papakura (A) # 9.3 8.9 $330,381
Franklin 5.4 7 $338,519
Thames Coromandel 8.3 9.1 $443,732
Hauraki* 12.8 13.2 $243,786
Waikato 16.2 20.8 $253,663
Matamata Piako 14.8 11.7 $262,199
Hamilton # 8.7 9.9 $320,215
- Hamilton North East 8.8 9.4 $395,402
- Central City/North West 8.4 9.4 $303,392
- Hamilton South East 6.5 12.2 $292,760
- Hamilton South West 8.8 8.7 $297,287
Waipa 17.3 18.5 $296,495
Otorohanga* 26.1 31.4 $191,775
South Waikato 17.5 16 $125,062
Waitomo* 20.4 18.7 $136,728
Taupo* 5.7 6.4 $320,830
Western Bay of Plenty 1.4 10.8 $377,621
Tauranga # 3.4 1.6 $405,638
Rotorua 16.9 21.1 $240,045
Whakatane 3.1 4 $308,004
Kawerau* 20.2 20.6 $133,842
Opotiki* 7.1 8.5 $191,574
Gisborne 22.4 18.9 $226,650
Wairoa* 13.1 18.7 $104,705
Hastings 1.5 4.1 $302,228
Napier City # 1.2 1.4 $301,298
Central Hawkes Bay 4.2 7.8 $208,721
New Plymouth 9.6 9 $294,074
Stratford* 26.6 26.5 $173,613
South Taranaki 22.4 20.7 $183,718
Ruapehu* 20.4 22.9 $132,990
Wanganui 13.6 14.4 $183,969
Rangitikei 15.9 20.5 $155,996
Manawatu 10.9 12 $217,361
Palmerston North # 15.8 15.1 $279,491
Tararua 22.6 21.7 $130,106
Horowhenua 16.9 19.4 $180,772
Kapiti Coast 13.9 13.8 $316,910
Porirua (W) # 12.6 15.1 $328,656
Upper Hutt (W) # 16.5 13.2 $301,221
Lower Hutt (W) # 16.5 15.5 $325,524
Wellington City (W) # 9.8 9.8 $463,453
- Wellington City & Southern 7.6 8.2 $483,403
- Eastern Suburbs 9.5 8.7 $500,239
- North Wellington 12.2 11.6 $409,982
- Western Suburbs 10 11.3 $517,470
Masterton 13.9 19.1 $215,767
Carterton* 19 13.4 $226,380
South Wairarapa 19.7 24.3 $248,313
Tasman 9.1 8 $345,305
Nelson # 3.9 5.2 $320,089
Marlborough 6.3 5.5 $313,906
Kaikoura* 9.2 -9.3 $325,167
Buller* 18.3 18.2 $165,024
Grey* 17.4 18.3 $202,693
Westland* 14.8 26.5 $212,286
Hurunui* 8.4 3.7 $288,529
Waimakariri 8.1 9.2 $293,694
Christchurch City # 9 9.5 $328,873
- East 8.4 10 $273,104
- Hills 9.2 9 $428,563
- Central City and North 8.4 7.4 $392,345
- Southwest 10.7 11.7 $309,705
Banks Peninsula* 10.4 18.3 $383,966
Selwyn* 24.6 23.2 $337,540
Ashburton* 15.9 14.6 $220,323
Timaru 9.8 11.1 $208,768
MacKenzie* 8.4 -1.4 $226,844
Waimate* 13.4 7.6 $146,114
Waitaki 13.7 11 $185,500
Central Otago 7.6 10.9 $275,651
Queenstown Lakes 4.6 1.3 $539,183
Dunedin # 4.6 4.1 $261,799
- Central/Northern City 3.4 4.5 $267,027
- Peninsular/Coastal Dunedin 7 5.2 $249,192
- Southern City 3.8 2.2 $248,901
- Taieri 5 2.3 $277,325
Clutha 4.6 19.5 $145,799
Southland 6.2 7.5 $172,679
Gore 24.7 14.1 $115,992
Invercargill # 15.4 13 $161,894

Total NZ 9.4 9.6 $347,005

Auckland Region (A) 7.6 7.3 $446,609
Wellington Region (W) 12.1 11.9 $382,415
Main Urban Areas # 8.8 8.6 $385,244

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.

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.

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.

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.

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.

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.

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.

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.

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.
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.

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.

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.

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.

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.

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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