Residential property values rise in main centres

3 February 2015

Residential property values rise in main centres

The latest monthly QV Residential Price Movement Index shows that nationwide residential property values for January have increased 5.7% over the past year and 2.0% over the past three months. This means they are now 19.2% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 4.9% and values are now 2.0% above the 2007 peak.

The Auckland market has increased 11.6% year on year, 5.1% over the past three months and 41.9% since 2007. When adjusted for inflation values are 10.7% over the past year and are 21.3% above the 2007 peak.

QV National Spokesperson Andrea Rush said, “The nationwide increase in values is mainly being driven by Auckland which has seen a continued acceleration in values.”

“However, the other main cities and many provincial centres are now also showing more moderate increases in value as well.”

“Following a big month of sales in December there remains a shortage of properties listed for sale and this is continuing to put pressure on values and also on buyers, particularly in Auckland and Hamilton where many who are keen to buy cannot find a suitable property.”

“Interest rates have come down again and there have been suggestions a possible lowering of the Official Cash Rate this year could make borrowing even more affordable. However, for first home buyers, the requirement for a 20% deposit due to the LVR restrictions is still too great a hurdle for many.”

Auckland
Home values in Auckland continued to accelerate across the city with some areas up more than others.

Taking a closer look at values in the old Auckland City area; Auckland City–South saw the greatest increase with values rising 7.9% over the past three months and 14.1% year on year. Auckland City–East was also up 6.7% over the past three months and 13.6% year on year; while Auckland City–Central increased 4.7% over the past three months and 11.2% year on year.

In Manukau, Papakura District saw the greatest increase with values accelerating 7.3% over the past three months and 11.3% year on year; Manukau–North West values rose 6.6% over the past three months and 13.4% year on year; Manukau Central was up 2.6% over the past three months and 10.1% year on year; and Manukau East values increased 3.3% since November and 8.7% year on year.

On the North Shore, North Shore–Onewa values accelerated rising 7.1% over the past three months and they are now 12.5% higher than they were in January 2014; North Shore – North Harbour values have increased 3.1% since November and are up 11.0% year on year; and North Shore – Coastal values rose 2.5% over the past three months and 9.9% year on year.

Waitakere City home values rose 4.9% over the past three months and 11.3% since January 2014; while and Rodney District values rose 1.3% since November and 7.8% year on year.

QVhomevalue Auckland Valuer James Wilson said, “There is a severe shortage of listings across Auckland and we are getting reports that people are cautious about selling their homes without first securing somewhere else to move to.”

“The LVR restrictions appear to be continuing to impede those buyers without a 20% deposit and getting into a home is being made more difficult as the shortage of stock is creating more competition and thus upward pressure on values.”

“Demand is high for properties in new housing developments where the LVR restrictions do not apply and this is pushing values up including those in Flat Bush, the Addison development in Takanini, Karaka Lakes, Harbourside, Mill Water, Massey, Henderson and Albany Heights.”

“The apartment market is continuing to show signs of strengthening as demand grows for larger owner occupier apartments.”

“This is resulting in growing confidence amongst developers who are green lighting apartment projects in areas such as Grey Lynn Ridge, Freemans Bay and the Karangahape Road precinct.”

Hamilton and Tauranga
Residential property values in Hamilton City increased by 2.6% over the past three months 3.5% year on year and they are now 3.3% higher than the previous peak of 2007.

Home values in Hamilton-South East increased the most over the past three months up 3.1% since November and 2.8% year on year. Hamilton-South West values also rose 1.3% over the past three month and 3.9% year on year. Home values in Hamilton-North East were up 2.9% over the past three months and 4.0% year on year. Hamilton Central and North West values have increased 2.5% since November and 2.0% year on year. The Waipa District increased 2.6% over the past three months and 5.0% year on year.

QVhomevalue Hamilton Registered Valuer, Nicky Harris said, “QV valuers have been kept busy with lots of activity over Christmas, which is unusual for that time of year and listings are very low in the housing market for good quality stock.”

“There have been reports of Aucklanders looking for property in Hamilton. This is mainly investors adding to their rental portfolio but there have been some reports of people considering commuting from Hamilton to Auckland, or making a complete move to Hamilton as it offers more affordable housing.”

“Activity has also been ramping up in Waipa townships. Cambridge is now almost on par with Hamilton in terms of values now and properties in Te Awamutu that have been on the market for some time now seem to be selling.”

“Last year the North Eastern Hamilton suburbs were dominating market activity but now other suburbs are performing well too.”

“Investor interest has dropped off a little and first home buyers are slightly stronger due to improved bank offerings and lower interest rates.”

Home values in Tauranga City have increased by 1.3% over the past three months, 4.0% year on year and they are now 5.0% below the previous peak of 2007.

Values in the Western Bay of Plenty increased 0.3% over the past three months and 5.5% year on year, and they are now 5.8% lower than 2007 levels.

QVhomevalue Registered Valuer Mairi Macdonald said, “The housing market in Tauranga is steady with good activity and sales. There is strong buyer interest in new subdivisions in Papamoa and the entry level price bracket suburbs such as Greerton and Welcome Bay.”

“The Western Bay of Plenty market remains stable with good interest in coastal properties in Waihi Beach and steady sales activity in the other regional towns.”

Wellington
Home values in the Wellington region overall increased 1.3% over the past three months and 0.8% year on year and values are now at the same level as they were in the previous peak of 2007.

Wellington–Central and South home values increased the most since November, rising 2.4% and 2.8% year on year; Wellington–East was also up 1.3% over the past three months and 2.4% year on year; Wellington–West was steady with values rising slightly by 0.7% over the past three months and 0.5% year on year; while Wellington–North values were also steady up slightly by 0.8% since November and 0.8% year on year.

Upper Hutt home values are showing a downward trend decreasing 2.5% over the past three months and 0.9% year on year; Lower Hutt values increased 1.7% over the past three months and 0.2% year on year. Values on the Kapiti Coast rose 1.5% over the past three months and 2.7% year on year; while Porirua City was stable with values increasing 1.0% since November but decreasing 0.1% year on year.

QVhomevalue Registered Valuer Kerry Buckeridge said, “At the end of last year we saw a significant increase in listings and sales around the city and reasonable prices were achieved.”

“There’s been a modest upward movement in home values in Wellington City and Lower Hutt but Upper Hutt is not following that same trend.”

“In the first weeks of January, there was more buyer activity in the northern suburbs, Porirua and the Hutt Valley than in Wellington City."

“We’re now seeing advertising volumes increasing dramatically and valuers are fielding enquiries from buyers, sellers and renovators as people kick into gear after the holiday break.”

“Well-presented properties do well on the market, however buyers continue to be conservative and cautious and sellers need to set realistic price expectations.”

Christchurch and Dunedin
Home values in Christchurch City increased 1.7% over the past three months and 3.4% year on year and are now 24.3% higher than in the previous peak of 2007.

A closer looks shows Christchurch–Central and North home values rose 2.1% over the past three months and 4.9% year on year; Christchurch-East was up 1.5% over the past three months and 3.2% year on year; while Southwest-Christchurch values increased 1.8% over the past three months and 5.7% year on year; Christchurch-Hills values increased 1.2% over the past three months but were flat with a 0.0% increase year on year; while Chirstchurch–Banks Peninsula values were down 1.5% over the past three months but rose 0.8% year on year.

Values in the Waimakariri District have also increased 1.4% over the past three months and 3.6% since January 2014; while values in the Selwyn District also increased 1.4% over the past three months and 5.4% year on year.

QVhomevalue Christchurch Registered Valuer Daryl Taggart said, “Sales volumes have increased noticeably and there are a good number of homes listed for sale currently which is a continuation on from buoyant level of activity we saw in the Christchurch housing market in December.”

“The main driver in the market is the demand and supply of new houses which are beginning to ease the demand pressure created by the lack of housing following the earthquakes.”

“The extra supply of new homes coming on to the market coupled with a higher number of homes seeing earthquake damage repairs completed is now impacting on the upward pressure on values as demand balances with supply.”

“The result is we are no longer seeing home values increasing at the same rate they were 12 to 18 months ago.”

“First home buyers seem to be more used to the environment of the loan to value ratio restrictions and it’s possible the lower long term interest rates of offer may help with home affordability which could lead to increased interest and activity at the lower end of the market.”

Home values in Dunedin City as a whole have increased by 1.0% over the past three months and 1.4% since January 2014.

Taking a closer look, Dunedin–Peninsula and Coastal values increased the most, up 2.5% over the past three months and 3.8% year on year. Dunedin-Taieri values increased slightly by 0.7% since November and rose 2.1% year on year; Dunedin-Central and North values increased 1.8% over the past three months and 1.2% year on year; and Dunedin-South values were flat over the past three months and decreased slightly by 0.3% year on year.

QVhomevalue Dunedin Registered Valuer Duncan Jack said, “Listing numbers are slowly increasing since the drop in numbers over the Christmas period but they are still down slightly on December.”

“Demand decreased over the Christmas period as people went on holiday but buyer interest and demand is now good and many multiple offer scenarios are being reported.”

“Attractive interest rates may be helping to create the increasing demand we are now seeing however despite this value levels across the city remain steady which may indicate buyers are still fairly price sensitive in Dunedin.”

“The majority of sales are occurring in the $200,000 to $300,000 value range but confidence and buyer interest within the higher value part of the market above $300,000 also appears to be increasing.”

Provincial centres
Residential property values in most provincial centres are showing an upward trend over the past three months with the exception of Gisborne and Wanganui and the West Coast Districts of the South Island which are still showing a downward trend.

In the North Island, the Auckland effect is helping values increase to the North and South of the Super City with residential property values Kaipara District rising 5.7% since November alone and 6.8% year; and values in the Franklin District also up 1.7% over the past three months and 8.6% year on year.

In the South Island, value increases have generally been at a slower rate and some areas are showing decreases. Invercargill City is showing upward movement in values increasing 1.9% over the past three months and values are now 0.7% higher than this time last year. Values in the Marlborough District were also up 0.6% over the last three months and 1.6% year on year and Timaru District saw values increase 1.9% over the past three months and 5.9% year on year.

Click here to see the QV Residential Price Movement Index for January 2015.

ENDS

© Scoop Media