Monday 13th February 2006

Steady Growth in the Property Market

QV’s property statistics released today indicate that residential property values rose by 16.8% over the last 12 months.  The growth in residential prices reported for January is a steady increase against the 15.8% reported in December.

“Although we are still reporting strong growth of 16.8% nationally, anecdotal feedback and market activity suggests that the market may be beginning to level out.  If so, we’d expect to see the Residential Price Movement ease through the second half of summer” says QV spokesperson Blue Hancock.

In the main centres Hamilton showed the strongest growth of 26.0%.  However, this was down slightly on the 26.9% reported in December.  Of the other main centres Christchurch led the way with 20.8%, Wellington 13.3%, Auckland 11.4% and Dunedin 10.4%.

The increase in property values remains strong across the major provincial cities, with Whangarei 32%, Rotorua 31%, Gisborne 27%, and Palmerston North 21.1%.  The New Plymouth market appears to be easing with annual growth now reported at 19.6%.

Main Urban Areas Commentary:

Auckland:
Growth in Auckland City property values has increased to 11.4% over the 12 months to January 2006, up from 7.9% growth to December 05. This increase in the level of growth is evident across all areas within Auckland City.  Southern Suburbs continue to have the highest growth rate of 12.7%.

Waitakere City (12.3%), North Shore City (14.0%) and Papakura (17.2%) are all showing a similar level of growth to that reported last month which offers support to previous reports that growth is stablising in many areas.

Property values increased 14.6% in Manukau City over the 12 months to January. Dwellings in the lower price bracket are showing strong value growth as first home buyers seek to enter the market before the continued high growth further limits their opportunity, and developers seek to profit from completing minor renovations.

Hamilton:
Property values in Hamilton increased 26.0% over the 12 months to January 2006, while the average sale price ($300,834) just exceeding $300,000 for the first time.

Growth eased slightly from December (26.9%), this was driven by the South Western suburbs where the growth (26.5%) has come back to be more in line with the region and the average sales price has reduced slightly to $265,391.

Wellington:
Property values in the Wellington area are continuing to show strong growth and there are indications that the market remains healthy with strong demand from buyers in all areas.  The largest increases are in the lower priced end of the market and the high value properties with premium attributes such as views and location.

Wellington City residential property values increased by 13.3% (up from 12.9% to December) driven by an increased level of growth in Central and Southern suburbs (14.0%). The growth in the Eastern suburbs (10.8%) has slowed back to the level it was in September 2005, after a peak of 12.7% in December.

The level of property value growth in Lower Hutt increased to 14%, returning to the levels of growth experienced in October 2005. Upper Hutt (16.8%) and Porirua (15.7%) continue to show strong growth.

Christchurch:
Property values in Christchurch show 20.8% growth over the 12 months to January, a similar level to the 20.2% recorded in December.  The average sales price for the city was $307,681.

Within Christchurch, all areas are showing a similar level of growth: East (21.6%), Hills (21.2%), Central City and Northern areas (21.2%) and Southwest (20.6%).

Market activity suggests semi-modern and older town houses are not achieving the same level of growth as the wider market, and some of the speculative pricing of high end properties may be coming to an end.

Dunedin:
Dunedin City properties increased in value by 10.4% over the 12 months to January, down from 12.2% to December.  The decrease in the rate of growth can be attributed to significant increases in property listings over the last three months.  Market demand remains high for good quality properties, which is why the average sale price has continued to increase.  The average sale price for Dunedin this month is reported at $255,719.

All surrounding areas are showing stable growth: Taieri 14.6%, Southern areas 11.5%, Peninsular and Coastal Dunedin 9.3% and Central and North at 8.4%.

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