Monday 12th December 2005

Residential market remains buoyant

QV’s November property statistics indicate that residential property values increased 15% annually, up from 14.5% growth reported in October.

The property value growth rate for November is the highest growth rate reported by QV this year, and is a turnaround from the slowdown that occurred in October, where growth was down from 14.9% in September.

“15% is a significant level of annual growth, and is an indication that the market is remaining buoyant despite thoughts that the market may have been beginning to level out” says QV spokesperson Blue Hancock. 

In most areas property value growth rates were above those reported in October, including main centres Hamilton (27.7%), Christchurch (19.3%), and Wellington (12%). The growth rate in Dunedin eased to 13.9% from 16.2% in October, while Auckland City property values grew a comparatively low 4%.    

Wanganui continues to be one of the leading centres in the country with property value growth of 38.3%, while Whangarei (34.5%), Gisborne (28.4%) and Rotorua (27.7%) are continuing the trend of areas with an availability of affordable residential property experiencing the highest value growth levels. 

Main Urban Areas Commentary:

Auckland:
Auckland City property values increased 4% over the 12 months to November, with the average price of $475,841. While the overall growth rate for Auckland City can be considered marginal, there are still areas within the Auckland City market that are remaining buoyant, most notably in the Southern Suburbs (8.5% growth, average price $420,390).

In contrast to Auckland City, close neighbours Manukau (13.9%), North Shore (13.6%), and Waitakere (12.2%) continue to experience property value growth rates closer to the national average, illustrating that there remains strong growth in the greater Auckland market.   

Hamilton:
Property values in Hamilton grew 27.7% over the 12 months to November, making Hamilton one of the country’s leading property hotspots. All areas of the Hamilton market are remaining buoyant; South West (30.9%), Central City/North West (28%), Hamilton South East (27.7%), North East (25.1%).

Although the growth rate in Hamilton residential values has increased substantially this year, there is anecdotal evidence that some investors may be leaving the market which may result in slowing. It is becoming increasingly difficult to rent properties and in some instances landlords are being forced to reduce rentals in order to attract and retain tenants.

Wellington:
Property values were up 12% in Wellington City, the highest growth level since the monthly statistics were first reported by QV in January.   

In the Kapiti (15.5%) and North Wellington (14.3%) areas the market has accelerated which appears a reflection of the demand for lower priced homes.

Residential properties in Lower Hutt grew in value by 13.2% with an average price of $277,366, making Lower Hutt the only area in the region to have noticeable easing in both the average price and growth rate from the statistics reported in October.

Christchurch:
Property values in Christchurch were up 19.3%, consistent with figures reported for the area in previous months, indicating that the market appears to be in a holding pattern at the moment. Reports from valuers also indicate that some vendors have to revise asking prices after little or no interest from purchasers. 
           
Although the average price of residential property in Central City/Northern areas ($437,237) and Hills areas of Christchurch ($344,262) vary, the growth in property values in these areas was identical at 17.7%.

Dunedin:
Dunedin City property values grew 13.9% over the 12 months to November. Although this growth rate compares well with other main centres, Dunedin property value growth has slowed from over 20% growth reported earlier in the year.

Residential properties in Southern Dunedin represent the most affordable buying in the city, with an average price of $229,046 and growth of 20.7%, while properties in Central and Northern areas of the city grew in value by 11.7% with a higher average price of $250,493.