The latest monthly QV House Price Index shows that nationwide residential property values for April have increased 12.0% over the past year. Values rose by 2.1% over the past three months and are now 37.1% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 11.6% and values are now 16.9% above the 2007 peak. The average value nationwide is now $568,058.
The Auckland market has increased 16.5% year on year which is a slightly slower annual rate than we saw in March, when it rose 16.9%. Home values in the Super city have risen a total of 1.5% over the past three months reversing a downtrend in values seen in the previous quarter. Values there are now 72.5% higher than the previous peak of 2007. When adjusted for inflation values are 16.0% over the past year and are 47.1% above the 2007 peak. The average value in the Auckland region is now $942,760.
QV National Spokesperson Andrea Rush said, “All the main centres around New Zealand and many regional centres have seen home values increase during April, with the promise of continued record low interest rates providing confidence in the housing sector.”
“All parts of the Auckland region are rising again however at a slower rate than many other upper North Island centres such as Hamilton, Tauranga and Rotorua as well as in the districts surrounding areas like the Thames Coromandel, Waipa, Hauraki, Matamata-Piako and Waikato Districts.”
“Of particular note are value rises to the north of Auckland, in the Kaipara District up 9.0% over the past three months and the Far North District up 4.4% over same period.
“The Wellington market is also continuing to see high levels of activity and demand and strong value growth while the Dunedin and Christchurch are also rising at a slightly slower pace.”
“The Queenstown housing market is also now accelerating with values up more than 6.6% in the past three months alone with supply unable to keep up with demand for housing there.”
“Values in many other regional centres around the country also continue to rise at the fastest rates seen since prior to the previous peak of 2007. Much of this growth appears to be driven by the promise of record low interest rates continuing and increased activity from those looking outside of the main centres for either more affordable homes or higher yields for rental property.”
“Agents are reporting sale volumes for April were lower than in March, however this is often the case due to the school holidays and Anzac weekend falling during the month and many buyers take a holiday during that period.”
Home values across Auckland are on the rise again ending a downward trend in some parts of the Super City housing market over the past six months following regulatory changes to curb investor activity in the region and restrictions on the flow of capital out of China introduced late last year.
Home values were up slightly by 0.9% in the former Auckland City council central suburbs over the past three months and 13.5% year on year. The average value in these suburbs is now $1,101,785.
Waitakere City home values rose 2.3% over the past three months and 17.7% year on year. The average value there is now $753,880. Values on the North Shore increased 2.0% over the past three months and 16.1% year on year. The average value there is now $1,101,442. Manukau City was up 2.5% over the past three months and 20.8% year on year. The average value there has now ticked over $800,000 to $812,657. Papakura District values were relatively flat rising just 0.1% over the past three months but rose a huge 24.4% year on year. Rodney values were up 1.9% over the past three months and 17.3% year on year. The average value there is now $836,196. While, Franklin values were also up 1.7% over the past three months and 18.7% year on year and the average value there is now $594,022.
QV homevalue Registered Valuer, James Wilson said, “Throughout April we have been observing renewed optimism in the housing market as interest rates remain at historic lows and capital gains are still being realised at record levels.
“Increasingly we are witnessing unconditional offers being made in order to secure a property without completing adequate due diligence. This behaviour is driven by a growing fear of missing out which appears to be rife across the market currently.”
“Properties which offer potential for intensification under the Proposed Auckland Unitary Plan are increasingly popular.
“However purchasers need to ensure that they fully understand the requirements of the PAUP and not just focus solely on density regulations”
“Market participants are making healthy capital gains through the on-selling of ‘off plan’ purchases as they near completion.”
“Small land sites are popular within modern developments which are then improved with attached townhouse or apartment units given their relative affordability.”
“Investors need to engage in more comprehensive sensitivity analysis to ensure long terms returns are sustainable if variables such as interest rates were to change. We are still seeing investors basing purchase decisions solely on the chance of capitals gains.”
“We are still concerned about the lack of awareness by homeowners regarding the insurance of their properties and the ‘sum insured’ replacement amount they agree with their insurer. We strongly recommend seeking the advice of a registered valuer or quantity surveyor on this matter.”
Home values across Hamilton City continued to accelerate rising 5.2% over the past three months and 25.3% year on year. The average value in the city is now $471,072. Values in the Waipa District were up a huge 7.1% over the past three months. They are now 19.0% higher than in April last year. The Waikato District rose 5.8% over the past three months and 26.7% year on year.
QV homevalue Hamilton Valuer, Stephen Hare said, “The rapid growth in the Hamilton market over the past six months means that home values in the city are now selling at between $50,000 and $100,000 above CV across Hamilton. This reflects the fact that home values have risen across the city by as much as 20.0% since the new rating values for Hamilton City were set at September 1, 2015.”
“The most sought-after properties in Hamilton remain at the entry level end of the market in the $400,000 to $500,000 price bracket. Competition and demand is underpinned by Auckland investors, Hamilton investors, first home buyers and other locals, all vying for the same properties, which continues to drive values up.”
“In the surrounding regions, we are also seeing values rising in smaller towns such as Matamata and Te Awamutu as first home buyers look for more affordable homes within commuting distance of Hamilton. Morrinsville is also seeing strong demand for the lower bracket properties between $250,000 and $350,000 and there appears to be a growing trend of Hamilton first home buyers looking to the town as a more affordable place to purchase a home.”
“It is a lot easier to enter the Morrinsville property market with less supply constraints and more affordable properties for first home buyers. It is also within commuting distance of Hamilton (30 minutes).”
“In Matamata agents report strength in the lower end of the market due to increased interest from out-of-town investors driven by the attractive yields they can get there.”
Home values in Tauranga City continue to rise, up 3.6% over the past three months and 21.5% year on year. The average value in the city is now $577,494. Western Bay of Plenty home values also continued to see accelerate up 7.3% over the past three months alone and 21.2% year on year. The average value in the district is now $509,848
QV homevalue Tauranga Registered Valuer David Hume said, “The market remains very buoyant in the Bay of Plenty, with auction still being the preferred selling method for most vendors as the market is moving so quickly it’s hard to put an asking price on homes.”
“Auckland buyers including movers and investors continue to be a strong driving force in the market.
One recent sale of an investment property selling in Parkvale involved a 10-way multi offer scenario, with nine out of the 10 buyers from Auckland.”
“The Western Bay of Plenty is also continuing to show strong growth with significant value increases for both existing homes and bare sections. An example of this is 850 square metre residential sections in Paengaroa, which were selling for $80,000 last year, are now selling for $170,000.”
“Given that demand for property remains strong and indications are that the historically low interest rates will be in place for some time, it’s unlikely that the boom in the property market in Tauranga will ease any time soon.”
The QV House Price Index for the entire Wellington region shows home values rose 2.9% over the past three months and 8.4% year on year and values are now 9.0% higher than in the previous peak of 2007. The average value across the wider region there is now $496,812.
Home values in Wellington City suburbs increased 3.4% over the past three months and 9.9% year on year. The average value there is now $599,482. Lower Hutt rose 3.0% over the past three months and 7.0% year on year and the average value there has now ticked over $400,000; while Upper Hutt was up slightly by 0.5% since February; Porirua also rose 2.9% and the Kapiti Coast was also up 3.3% over the same period.
QV homevalue Wellington Registered Valuer, David Cornford said, “Home values in Wellington have continued to strengthen across the board, with properties in the bracket of $700,000 and under, increasing at the fastest rate.”
“The first home buyer segment of the market is particularly buoyant with open homes continuing to be well-attended and most properties are receiving multiple offers. Properties in Tawa, Johnsonville, Newlands, the Hutt Valley, Paparangi and Porirua are popular with first home buyers who have been forced to look further out of the city in order to secure a property.”
“Investors, including out-of-town investors also continue to be active in the market and are competing with first home buyers, increasing demand and pushing up prices. City fringe home and income properties, multi-unit flats and do ups are selling well.”
“Apartments and city fringe townhouses appear to be increasing in popularity as they offer a more affordable entry into city living home ownership than a stand-alone home. As a result of this we are seeing developers starting to become more active in this market.”
“Auction and tender have now become the preferred marketing method and two and a half week marketing campaigns are becoming common in areas such as Aotea and Whitby.”
“The Lower Hutt suburb of Petone is performing strongly with a number of sales above $700,000 and a handful above $800,000; when just 12 to 18 months ago it was relatively uncommon to see a sale in the suburb above $700,000. Due to its location and facilities, Petone is in demand from Wellington and Hutt Valley buyers who are all now competing for a relatively small number of homes there.”
“We are also seeing an increasing number of sales above the $300,000 level in traditionally first home buyer areas such as Taita and Naenae, whereas a year ago it was relatively uncommon to see sales above $300,000 in these localities.”
Home values in Christchurch City increased by 1.0% over the past three months and 3.4% year on year. The average value in the city is now $488,943.
QV homevalue Christchurch, Registered Valuer Damian Kennedy said, “The Christchurch housing market has seen modest growth across all price brackets over the past month.”
“The lending environment is favourable for first home buyers given that the record low interest rates are now expected to remain for some time and this appears to be stimulating activity at the lower end of the market with solid demand for homes under $450,000 from both first home buyers and investors.”
“There is now a softer rental climate in Christchurch that there was at the height of the rebuild when rents became inflated, so some investors are getting lower returns than they may have anticipated. However rents are still higher than they were prior to the major earthquakes.”
“It’s advisable to check your property for damage after any earthquake. The three-month window for making claims from the Valentine’s Day earthquake is coming to an end so home owners need to remember to check their properties for damage so they can file a claim in time.“
Home values in Dunedin are continuing to show steady increases rising by 2.2% over the past three months and 9.0% year on year. The average value in the city is now $317,714.
QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Dunedin home values are continuing on the upward trend we have been seeing over the past six months.”
“There continues to be good levels of demand from first home buyers, local movers, those relocating to live in the city and also from out-of-town investors looking for the good yields that the city offers.”
“The strongest competition continues to be the low to mid value ranges between $200,000 and $350,000.”
“As with previous months the competition from buyers is resulting in properties selling quickly and assisting in driving values levels up and QV data also shows that sales numbers are up by more than 15.0% on the same period last year.”
Napier home values continued their strong upward trend rising 4.2% over the past three months and 9.9% year on year and the average value in the city is now $363,045. While, Hastings values continued to rise up 2.7% over the past three months and 9.1% year on year. The average value there is now $332,643.
QV homevalue Hawkes Bay, Registered Valuer Bevan Pickett said, “The Hawkes Bay housing market continues to see strong levels of activity and demand which is resulting in a continuation of the strong upward trend in home values seen over the past six months.”
“Properties continue to sell quickly and multiple offers situations are common. Out of town buyers still have a noticeable presence in the market and many buyers are struggling to find something suitable before it is sold.”
“There is still a clear lack of listings available making it slim pickings for buyers and meaning there is a lot of competition for those properties on the market, making it a sellers’ market currently.”
“In terms of value growth, most price brackets are seeing significant increases in value however the entry level and investment sector of the market is seeing the highest rate of growth.”
Nelson home values rose 3.3% over the past three months and 9.5% year on year. The average value in the city is now $451,124. The Tasman District also increased by 2.3% over the past three months and 6.9% year on year and the average value there is now $446,291.
QV homevalue Nelson Registered Valuer Craig Russell said, “The Nelson market remains strong with good levels of activity and demand. Auctions are achieving excellent results at present with prices obtained being significantly over vendor expectations in some cases.”
“Listing numbers continue to fall which is contributing to strong demand across the board.”
“Investors remain active in the market and we are seeing some good prices paid for flats in central Nelson.”
“We are also seeing high prices paid for other locations close to good schooling. Higher value properties in Atawhai are in strong demand with this location receiving good interest from out of town buyers.”
“Atawhai has been a slow mover over the past three years with purchasers now seeing real potential in the area.”
“The OCR remained unchanged in April however with the Reserve Bank governor indicating that further cuts could be expected later in the year which is giving buyers’ confidence that interest rates will remain low for the foreseeable future.”
Other Provincial centres
In the North Island, home values continue to rise in many places at the fastest rates seen since before the previous peak of 2007. This includes the Far North District, up 4.4% over the past three months and 13.7% year on year; the Kaipara District up 9.0% over the past three months and 17.5% year on year and the average value there has now ticked over $400,000. Rotorua has risen 5.0% and Whakatane has risen by 5.2% over the past three months. The only North Island areas to see a decrease in values over the past three months were South Taranaki which decreased the most, down 1.8%; Otorohanga (down 0.3%);Tararua District (down 0.8%); Horowhenua (down 0.3%) the South Wairarapa (down 0.2%) and Central Hawkes Bay (down 0.1%).
In the South Island, the Kaikoura District was up the most with values rising 7.4% over the past three months. There is also strong growth is occurring in Central Otago with the Queenstown market experiencing a perfect storm between a massive shortage of tourist accommodation and rental accommodation for people living in the town, as well as huge demand for homes, holiday homes and investment property. This is driving home values up with the Queenstown Lakes District market up 6.6% over the past three months and 17.8% year on year. The average value there is now $842,559. This growth is now spreading to nearby centres such as Wanaka, Cromwell and Clyde as people look outside Queenstown for more affordable housing and the Central Otago and Clutha Districts are both up more than 5.0% over the past three months. Meanwhile it appears investors have also returned to the Invercargill market and values are on the rise there too.
There were no areas in the South Island to see a decrease in values over the past three months. The Grey and Buller districts on the West Coast saw a reverse in the downward trend seen there for quite some time, with values rising 1.2% in Buller and 6.4% in the Grey District over the past three months.