Market activity set to bounce back
There have been no dramatic changes to values over the past month, which is a likely result of the holiday season which
generally sees less market buoyancy. At the same time, our qualified property consultants generally anticipate market
activity to bounce back in the coming weeks, as the peak holiday period ends and the loosening of the LVR restrictions
enable new buyers to enter the market.
The latest QV House Price Index shows nationwide residential property values have increased steadily over the past year
by 3.2% and by 1.2% in the three months to December. The nationwide average value is now $682,938.
Meanwhile, residential property value growth across the Auckland Region decreased by 0.4% year on year although values
did increase slightly by 0.1% over the past quarter. The average value for the Auckland Region is now $1,048,145.
For a full breakdown of the QV House Price Index figures for December please click here.
QV General Manager, David Nagel said, “The data is in line with what we anticipated; the busy Christmas period can mean
that people put off buying or selling until the quieter New Year period. As a result, we often don’t see any dramatic
changes in market activity or value growth – which appears to have been the case early this year.”
“In saying this, the loosening of the LVR restrictions (taking effect from 1 January 2019) should enable some new first
home buyers and investors to enter the market in the coming months. I don’t anticipate this impact to be overly
significant, but it may help drive a busy property market in the early stages of 2019.”
“I am particularly interested in the rental market where we’re seeing a lot of competition particularly in the
Wellington market. According to the Trade Me Rental Price Index, the cost of rent in Wellington is now very similar to
Auckland which really does say something. With the Healthy Homes Bill due take to effect later this year, I’ll be
closely monitoring the impact this will have on the supply and costs of rental accommodation.”
“Another point of interest is the continued growth on many smaller regional towns, particularly in the central and upper
North Island. Kawerau, Carterton, South Waikato and Ruapehu in particular continue to see strong quarterly growth
figures on top of solid annual growth.”
Auckland
Value growth remains slow across Auckland's suburbs. North Shore values dropped 1.1% in the year to December and by 0.3%
over the past three months. The average value there is now $1,212,664.
The former Auckland City Council central suburbs dropped 1.0% year on year and by 0.1% over the past three months and
the average value there is now $1,233,311. Waitakere values decreased by 0.2% year on year and by 0.2% over the past
three months. Manukau values increased by 1.2% year on year and by 0.9% over the past three months; Papakura values rose
0.6% year on year and by 0.2% over the last quarter and the average value there is now $701,230; Franklin values
increased 1.1% year on year and Rodney values were up 1.1% year on year.
QV Auckland Property Consultant, Hugh Robson said, “It’s fairly steady here in Auckland, with well-presented properties
close to services and amenities continuing to sell well. Investor demand appears to remain fairly steady although
possibly it’s eased back over the past few months.”
Wellington
Values across the whole Wellington Region rose 7.8% in the year to December and increased 3.2% over the past quarter and
the average value is now $688,074
Wellington City values increased 7.4% year on year and by 2.3% over the past three months and the average value there is
now $813,052. Meanwhile, values in Upper Hutt rose 12.1% year on year and 5.7% over the past three months; Lower Hutt
rose 6.7% year on year and 4.2% over the past quarter; Porirua rose 9.4% year on year 5.3% over the past quarter.
Finally, the Kapiti Coast rose 5.7% year on year and 2.2% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “The holiday season is now behind us and market activity will
start to pick up, however it’s not until after Wellington anniversary weekend that the market really kicks into gear.”
“The first three months of the year is generally a busy period in the market with buyers coming to the Capital City to
enhance their employment and educational opportunities. We’re also seeing families join the pool of buyers, including
those who’ve made plans over Christmas to upgrade or whose New Year’s resolutions include re-housing plans.”
“Stock levels remain low, however we should see a wave of fresh listings come to the market over the next three months
providing buyers with a bit more choice.”
“Tight supply, low interest rates, as well as a slight relaxing of the Loan to Value Ratios (LVR’s) is likely to combine
to form a relatively buoyant property market at the start of 2019. Despite this, value growth is expected to continue to
moderate over 2019 as affordability issues put a damper on the market.”
“First home buyers have had a strong presence in the market over the last two years and we expect this to continue into
2019, particularly given a slight relaxing of LVR’s.”
“Late 2018 saw a relatively settled market with modest value growth and buyers are continuing to take a measured
approach with more sales being conditional on getting bank finance and other conditions such as builders reports”
“Rents are increasing in the Wellington region as a shortage of rental accommodation continues with the cost of renting
in Wellington now similar to Auckland."
“The extremely competitive rental market has also meant tenants are increasingly choosing to renew their fixed terms or
roll over their leases. It’ll be interesting to see what effect the abolishment of letting fee’s and increased
compliance costs will have on rents over 2019.”
Hamilton
Hamilton City home values decreased by 0.2% over the past three months and values increased 5.0% in the year to
December. The average value in Hamilton is now $570,886.
Tauranga
Tauranga home values rose 3.9% year on year and by 1.6% over the past three months. The average value in the city is
$720,645.
The Western Bay of Plenty market rose 4.9% year on year and 3.8% over the past three months. The average value in the
district is now $654,083.
Christchurch
It’s a continuation of recent trends for Christchurch City, with values either holding or dropping slightly. Values are
slightly up year on year and also increased by 0.5% over the past three months. The average value in the city is now
$496,562.
QV Christchurch Property Consultant Hamish Collins said, “The market has remained stable over the Christmas period, with
no big value movements. Market activity is subdued which it typical at this time of year. We expect listings and buyer
enquiry to increase in the coming months.”
“Interestingly, real estate agents are reporting that most activity over the Christmas period is coming from first home
buyers in the $350,000 - $450,000 value range.”
Dunedin
Values in Dunedin continue their upward trend having increased 11.2% in the year to December and 3.5% over the past
three months. The average value in the city is $434,903.
Nelson
Nelson residential property values rose 8.4% in the year to December and by 2.4% over the past quarter. The average
value in the city is now $601,571. Meanwhile, values in the Tasman District have also continued to rise, up 6.0% year on
year and 1.0% over the past three months. The average value in the Tasman district is now $589,630.
QV Nelson Property Consultant, Craig Russell said, “Sales volumes have been strong over the summer months, with demand
still strong and values increasing at a moderate rate. Vacant rural residential sections, in particular, have been
sitting on the market for an extended period in recent months.”
“First home buyers continue to be active participants in the market, particularly in the traditional first home buyer
areas such as Stoke, Tahunanui and Nelson South.”
Hawkes Bay
Napier values rose 10.2% year on year and by 3.0% over the past three months. The average value in the city is now
$526,506. Hastings values are also continuing to rise up 12.1% year on year and 7.4% over the past three months. The
average value there is now $498,871.
Provincial centres
In the North Island, Kawerau, Carterton and South Waikato lead the way in quarterly growth, with value growth of 22.7%,
9.9% and 9.1% respectively. In terms of annual growth, Kawerau leads the way, up 30.1% followed by Wairoa (27.4%) and
Ruapehu (20.9%).
In the South Island, Southland, Invercargill and Gore regions lead the way in quarterly growth, with value growth of
6.8%, 3.2% and 2.6% respectively. Invercargill leads the way in annual growth, up 11.6%, followed by Nelson (8.4%) and
Central Otago (8.4%).
Annual change in values
*Please note, our partners CoreLogic have incorporated an improvement to the methodology in November 2018 which
underpins the House Price Index figures. The change only concerns aggregated indices (i.e. where an index covers
multiple Territorial Authorities).
This new methodology provides less volatility and a more precise measure of value changes. This change only impacts
recent movements, with the historical series mostly not impacted. If you have any questions regarding the change, please
get in touch with us by emailing communications@qv.co.nz