Steady Growth in Residential Property Values

Media release
12 January 2007

Steady Growth in Residential Property Values

QV’s December statistics for the residential property market show a 9.2% growth in national property values over the past year (calculated over the three months ending December 2006 in comparison to the same period last year). The annual increase in property values remains steady and consistent with the figures reported in November (9.4%) and October (9.6%). The average sale price for New Zealand moved up marginally to $348,886.

“The trend across the country continues to show steady growth in property values. Although the level of increase has been easing, a number of areas have seen a slight increase this month, typical of the real estate market through spring and early summer months. Supply and demand in most areas appears to be relatively evenly weighted” said QV spokesperson Glenda Whitehead.

Most of the main urban areas reported figures consistent with last month. Auckland City eased slightly to 6.7% (from 7.2% in November) and Wellington eased to 9.3% (from 9.8% in November). Hamilton sprung back up to 9.7% (up from the 8.7% reported in November), and Dunedin also rose from 4.6% in November to 6% in December. Tauranga and Christchurch remained stable at 3.4% and 9% respectively.

“Of the regional areas, the strong performers include Gisborne with 27.1% annual growth, South Waikato 21.7%, and South Taranaki 23.6%. Property value growth continued to ease in many provincial cities but still at very healthy rates with Invercargill 14.7%, Rotorua 14.5% and Palmerston North 13.5%” said Glenda Whitehead.
Main Urban Areas Commentary:

Auckland:

Auckland City property values grew 6.7% (calculated over the three months ending December 2006 in comparison to the same period last year), down from 7.2% reported for the period ending November. The average sale price for Auckland City was $531,754.

“The December statistics for the North Shore, Waitakere, Auckland and Manukau cities show a continued pattern of a gradual slowdown from earlier in the year. Easing annual growth rates in these areas come as no surprise due to reduced affordability and investor returns” said Glenda Whitehead of QV Valuations. “Sales volumes in these cities have fluctuated slightly throughout the year, but overall remained at similar levels. These are all signs of a steadying market”.

“Within the wider Auckland region, Rodney and Franklin districts have shown a slightly different picture, perhaps reflecting their differing nature to that of their neighbouring cities’ said Glenda Whitehead. “Rodney appears to have had a slight spring flush, with its annual growth rate climbing from a low of 6.6% in September to 10.2% in December. Franklin’s growth rate has varied widely over the last six months, now back to 7.3% similar to rates reported in September and October. Steady but relatively low sales volumes in this district may be causing these variations”.

“Our valuers report that properties are generally continuing to sell within realistic time frames, and people in the market continue to see it as a good time to invest in the Auckland market, albeit with a greater degree of caution than in preceding years” said Glenda Whitehead.

Hamilton:

Hamilton’s property values increased by 9.7% (calculated over the three months ending December 2006 in comparison to the same period last year), up from 8.7% as reported in November.

“The statistical evidence indicates that growth in residential property values in all parts of Hamilton recovered slightly in December after twelve consecutive months of slowdown. All parts of Hamilton experienced increases in growth rates with the largest increase recorded in South East Hamilton where the growth rate rose to 9.5% this month from 6.5% last month” said Richard Allen of QV Valuations.

“The slight increase in growth was also reflected in the average sale price in Hamilton which increased to $328,540 after hovering around the $320,000 mark in October and November. Expectations are that sales activity will increase in January and February 2007. However, we are unlikely to see significant growth in sale prices” said Mr Allen.

Wellington:

Wellington City’s residential property values increased by 9.3% over the past year (calculated over the three months ending December 2006 in comparison to the same period last year). The growth rate eased from 9.8% reported in November. The average sale price in Wellington City was $449,856.

“The wider Wellington region experienced strong market conditions with the number of sales increasing and properties selling quickly” said Max Meyers of QV Valuations. “The Hutt Valley continues strong growth in property values with Lower Hutt increasing by 17.2% and Upper Hutt 16%. Wellington’s growth rate has eased slightly but has proved to be steady at the rate of 9.3%. Kapiti Coast and Porirua also showed steady growth rates of 13.9% and 12.9% respectively.

“The outer, lower priced suburbs have seen average prices increase persistently over the last quarter, but the higher priced areas in Central, South, East and Western suburbs have seen average prices decrease slightly, reflecting more lower priced home sales” said Mr Meyers.

Christchurch:

Residential property values in Christchurch increased by 9% (calculated over the three months ending December 2006 in comparison to the same period last year), the same growth rate reported in November. The city’s average sale price was $337,178.

“Christchurch’s average sale price, which has been floating around $320,000 to $300,000 over the past few months, rose to above $330,000 for the period ending December. This has been fuelled by seasonal market activity, typical of the spring and summer months” said Melanie Holcroft of QV Valuations.

“The Christchurch market has held firm, with market activity relatively consistent throughout different sale price ranges. Sale activity appeared to be the strongest at the entry level segment of the market (in the $200,000 to $300,000 price range)” said Melanie Holcroft.

Dunedin:

Dunedin residential property values increased by 6.0% (calculated over the three months ending December 2006 in comparison to the same period last year), up from 4.6% last month. The average sale price in Dunedin was $261,514.

“We have seen a continuation of steady sustainable growth around 4.0% to 6.0% since August 2006. This trend is consistent with that experienced in the other major cities” said David Paterson of QV Valuations. “For the period ending December, growth is consistent across all areas in Dunedin, with the Central/Northern part of the city experiencing the highest increase in the growth rate from 3.4% last month to 5.9% this month”

“Indications are that there is still reasonable demand in the $200,000 - $300,000 price range. QV’s latest statistics show that 45% of residential sales fall within this range” said Mr Paterson.

Tauranga:

Tauranga property values increased by 3.4% over the past year (calculated over the three months ending December 2006 in comparison to the same period last year), the same level as reported in November 2006. The city’s average sale price was $408,900.

“After the two previous months of increasing growth rates, the growth rate remained stable at 3.4% for the period ending December. This is a continuation of a more positive direction, following on from the 8 months prior to October that had showed the rate of increase in property values was easing” said Christopher Boyd of QV Valuations. “The average house price has also increased by $3,262 to finish at $408,900, which is another new high in the Tauranga statistics”.

Click for the QV Residential Price Movement Report

ENDS

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