The latest monthly QV House Price Index shows that nationwide residential property values for July have increased 10.1% over the past year which is the fastest annual rate since 2007. Values rose 4.1% over the past three months and are now 27.4% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 9.9% and values are now 8.8% above the 2007 peak.
The Auckland market has increased 18.8% year on year, 5.7% over the past three months and 56.6% since 2007. When adjusted for inflation values are 18.5% over the past year and are 33.7% above the 2007 peak.
QV National Spokesperson Andrea Rush said, “We are now seeing a definite upward swing in market activity in the upper North Island. This is especially evident in Hamilton, but also in Tauranga, Whangarei, and the Franklin, Hauraki and Waikato Districts.”
“There’s also been increased interest from Auckland investors in the Wellington and Dunedin markets and while parts of the Wellington, Christchurch and Dunedin markets are showing some moderate increases other areas of these markets are flat or down slightly.”
“Sales volumes have been tracking down since March which is part of the normal seasonal downturn and also a result of a lower number of homes being listed for sale during winter.”
“Net migration remains at record highs and there are now incentives for new migrants to move to areas outside of Auckland, so this coupled with record low interest rates is likely to see continued upward pressure on home values as we move towards spring.”
The Super City Region is continuing to see a sharp upward trajectory in the QV House Price Index with home values up across all areas.
Hot on the heels of the average value in the old Auckland City Council region topping one million dollars last month; the average value in North Shore City has now also ticked over the milestone and is sitting at $1,007,836, with home values there are up 17.6% year on year and a huge 6.2% since May.
Waitakere City also saw values streak ahead up 21.6% since July last year and up a whopping 7.3% since May.
Auckland City values also rose a massive 20.1% since July last year and 4.6% over the past three months. Manukau City values also continue to show huge increases, up 19.6% year on year and 6.4% over the past three months.
Papakura continued a meteoric rise in values with huge demand for its relatively affordable homes pushing values up 22.2% year on year and 7.7% over the past three months alone.
Values in the nearby Franklin District are also starting to accelerate as people look further South for affordable homes, with values there rising 6.5% since May.
While values in the Rodney District to the north were also up 9.3% year on year and 3.9% over the past three months.
“QV homevalue Operations Manager Northern, Jan O’Donoghue said, “There’s still not enough existing stock or new homes being built, to accommodate the demand for housing in Auckland.”
“Investors and speculators continue to be very active across the Super City particularly in the suburbs that offer the most affordable housing such as Mt Roskill, Massey, Te Atatu and New Lynn and Papakura.”
“There is high demand for home and income type properties and any sites with development or subdivision potential.”
“High numbers of apartments have also been selling off the plan in central Auckland as demand for more affordable homes reaches a crescendo.”
“The Council is looking at whether it should remove density restrictions on land and instead look at height limits and tighter design controls on developments.”
The average home value across the Hamilton City is now $390,113. The QV House Price Index is showing a steepening upward trend as values track upward by 7.4% year on year and 3.8% over the past three months.
QV homevalue Hamilton Registered Valuer, Chris Price said, “As has been the case for the past few months, listing remain are very low and multiple agents are advertising to attract new listings.”
“To date there has been no winter slow-down at all and it looks like this the second half of the year is going to be a busy time.”
“Building consent numbers are beginning to track upwards towards a Spring/Summer construction period. Good quality rental propositions continue to be scarce both for buyers and tenants.”
“Sales volumes and activity is up significantly on winter over the past few years in regional towns like Te Awamutu, Ngaruawahia and Huntly as a result of higher demand for investment property and modern homes.”
Home values in Tauranga City have continued their upward trend seen over the past few months rising 7.7% year on year and 3.0% over the past three months.
Values in the Western Bay of Plenty have also risen by 5.9% since July last year and 3.3% since May.
QV homevalue Tauranga Registered Valuer David Hume said, “Investors from Auckland continue to be very active in the market.”
“Homes in affordable parts of the city are being snapped up by out of town investors looking for good yields.”
“There are reports of Aucklanders making offers over email and homes being brought sight unseen and without market valuation or building reports.”
“Demand in the regional towns such as Te Puke continues to grow as first home buyers priced out of the rising Tauranga market look further afield for homes still in an achievable price bracket.”
Home values in the Wellington City increased by 2.0% year on year and 0.2% over the past three months. The eastern suburbs are showing the biggest values rises with Wellington – East showing a 5.3% increase since July last year and a 1.4% increase since May. Whereas values in other parts of the city have remained flat or decreased slightly.
Values on the Kapiti Coast, Porirua, Upper Hutt and Lower Hutt are all up year on year but have been either flat or down slightly since May.
QV homevalue Wellington Registered Valuer, Kerry Buckeridge said, “We are seeing an increased presence from Auckland investors looking for high yield investment properties in Wellington.”
“These people have generally built up equity in the fast growing Auckland market and are now seeking investments providing cash yield and we are seeing an increased demand for multi-flat properties.”
“Reports indicate some of these buyers are expecting unrealistically high yields and need to adjust their expectations in order to be successful at tender.”
“Across all segments the number of properties listed on the market is low which is usual for winter and is increasing competition.”
“People shouldn’t be afraid to put their house on the market in winter as it’s often a good time to sell as there is less competition and you may achieve a good sale price, as long as your home isn’t too cold, damp or dark.”
“There’s still strong demand for homes in the $350,000 to $400,000 price range and homes in this entry level bracket are selling very quickly at the moment. One home in Newlands recently attracted 17 offers - which is a record number.”
“However, despite the upturn in demand we are still not seeing a push on sales prices as yet however an upturn in activity is often a pre-cursor to value increases.”
Christchurch and Dunedin
Home values in Christchurch City continued to plateau rising 0.5% over the past three months and 3.1% year on year.
QV Christchurch Registered Valuer Daryl Taggart said, “There has definitely been a change in sentiment in the Christchurch market from the heady days seen between 2012 and 2014.”
“However, well presented and located properties are still selling well and sales numbers remain steady we are just not seeing the significant increases in value along with the return of more normal market forces.”
“The winter seasonal downturn has kicked and there does not seem to be much driving the market currently.The “as is where is” market is still in demand from investors looking for the high yields and also from those looking to get into a more affordable home.”
Values in Dunedin rose 2.5% over the past three months, 2.8% year on year and they are now 4.4% above the previous peak of 2007. The average value in the city is now $298,928.
QV homevalue Dunedin Registered Valuer Duncan Jack said, “There’s a general lack of listings throughout the city and across regional Otago. Buyers however remain active and there is good interest for most properties listed with statistics indicating values levels to be increasing slightly in Dunedin.”
“There is some anecdotal evidence which indicates some increase in interest and enquiry from investors outside the region attracted by the relatively high yields available in some parts of the city.”
Values in the provincial areas closer to Auckland are starting to show a definite upward swing in sales volumes, demand and activity. Whangarei values increase 5.0% year on year; the Far North District was also up 5.4% and Hauraki District rose 10.7% over the same period.
In the South Island, Ashburton home values appear to have plateaued in line with the Christchurch market, decreasing 0.5% over the past three months. Timaru however continues to see value rises, up 8.6% year on year and 2.5% over the past three months.