Nationwide residential property values have risen again in June according to the latest QV index. Values are up 1.8% over the past three months, 4.2% up over the past year, and are now only 1.3% below the previous market peak of late 2007.
Jonno Ingerson, PropertyIQ Research Director said “all the main centres have increased in value over the past year, and all apart from Wellington have increased over the past three months. The fastest increasing areas are Auckland and Christchurch. There is more variability in the provincial centres and smaller towns across the country, as values in those areas respond to local economic influences”.
Ingerson said “sales activity has been significantly higher in the last few months than it has been for several years, with Auckland again stronger than most other areas. In contrast, the number of new listings coming onto the market has slowed considerably in recent months meaning reduced choice for potential purchasers. As a result sales activity is likely to slow in the coming months until the number of properties for sale once again increases, which typically will occur in spring”.
“Despite the number of sales being up on recent years, and values increasing, we are not experiencing a boom. Nationwide, the current number of sales is still around one third below peak levels, and over the past year values have increased only one third as quickly as they did in the boom years 2003 to 2007. Even in Auckland the rapid increase in values over the past few months is less than the rate seen in the boom years. Overall, New Zealander’s remain cautious around house buying and selling decisions”.
Values in the wider Auckland area are up 5.9% over the past year, but recent months have seen more rapid growth with values up 1.0% over the past month and up 2.6% over the past three months.
Values are increasing the fastest in the old Auckland city, up 6.8% over the past year, followed by 5.6% in North Shore and Manukau.
Across the Auckland area values are now 4.8% higher than the 2007 market peak and in old Auckland City values are 7.6% higher than this previous peak.
The shortage of listings and strong buyer demand in many Auckland suburbs is pushing value levels up to varying degrees. The leafy inner city suburbs continue to show the strongest value lifts, but this upward pressure has also now filtered out widely in all directions, as buyers are forced to look wider to meet their needs within their affordability range.
Subject to stock being available, there appears to be firm market conditions with good activity level for the winter period. Run-down properties in the central area are selling extremely well with buyers intending to fully redevelop the sites, and as always, there is good demand in popular school zones.
First home buyers continue to step into the market and professional couples are either trading up or upgrading their current homes. Investors are active in areas where return levels are adequate, but they are increasingly being outbid by first home buyers. Many buyers are refinancing to take advantage of favourable interest rates and banks competing for business.
New builds in many new subdivisions, such as the Ormiston – Flat Bush area, are selling relatively quickly leading to further projects being initiated. A steady supply of housing in new subdivisions now seems evident. Sections within new subdivisions are either now coming to the market vacant or via developer build-sell projects. Infill housing is taking place in some older developed suburbs, where zoning allows, or investors are land banking suitable sites for the future.
Values in Hamilton have risen 1.7% over the past three months, and are now 2.9% higher than the same time last year. In contrast to Auckland, values in Hamilton remain 9.5% below the 2007 market peak.
Tauranga values have continued their gradual increase, up 1.0% over the past three months and 2.1% above the same time last year. Like Hamilton, values in Tauranga remain well below the 2007 market peak, currently sitting 10.3% below their peak at that time.
While values in the Wellington area have increased over the past year by 1.4% this is much more modest than the other main centres. Values have been flat or decreased slightly in the past few months in the cities across the Wellington area, as concern around public service restructuring continues to dampen confidence. Values in the Wellington areas are currently 5.8% below the previous market peak.
Values in Christchurch have risen 5.8% over the past year and 1.3% over the past three months to now sit 1.5% above the previous market peak of late 2007.
The Waimakariri and Selwyn Districts continue to increase in value faster than anywhere else in the country, with both now well above the previous market peak. Waimakariri is up 13.4% over the past year and 12.2% above the 2007 peak, and Selwyn is up 12.2% over the past year and is 11.1% above peak.
Just as stocks of residential sections were dwindling, new stages within some of the city’s larger subdivisions and within new developments have started to take shape. There now looks to be a good supply of sections becoming available in the coming months with plenty of choice across the city and surrounding townships.
Values in Dunedin have been variable over the past few months but are now 2.8% above the same time last year and 4.3% below the 2007 peak.
The winter slow down has started taking affect with few enquiries coming in, and agents are reporting a lack of good listings. Properties that aren’t well presented are tending to hang around. Typically, lower valued properties are the only ones performing well in the market.
Most of the provincial centres have values within 2% of this time last year. The exceptions are Rotorua and Gisborne which are down 2.3% and 3.6% respectively, while steadily increasing values over the past six months mean that Palmerston North and Invercargill are 2.1% and 2.0% up respectively on this time last year.