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QV House Price Index, May 2021: Has the worm turned in the property market?


For the first time since July last year the QV House Price Index has shown a reduction in quarterly value growth from the previous month. The average value increased 8.8% nationally over the past three-month period to the end of May, down slightly from the 8.9% quarterly growth we saw in April, with the national average value now sitting at $931,928. This represents an increase of 23.7% year-on-year, up from 21.4% last month.

QV general manager David Nagel said: “This small reduction is particularly significant considering the QV House Price Index is a rolling average measure, which includes transactions from some of the most buoyant months earlier in the quarter. We can expect to see further reductions in the rate of growth as the impacts of the recent tax changes for investors and credit availability start to take effect.”

Of the 16 major urban centres we monitor, all except the four northernmost urban locations of Whangarei and the “golden triangle” of Auckland, Hamilton and Tauranga, have shown a reduction in quarterly growth compared to last month.

In the Auckland region, the average value now sits at $1,336,800, up 8.4% over the last quarter, with annual growth of 21.8%, up from April’s year-on-year growth of 19.0%.

However, the strongest gains in value are still mainly coming from within the centre of New Zealand. Growth in Napier, which led the pack last month at 14.2% per quarter, has reduced to 9% quarterly growth. Hastings was also showing exceptional quarterly growth last month at 14%, but has dropped down to 11.4% quarterly growth. Marlborough District leads the way this month at 12% quarterly growth, but this is also a reduction from the 13.7% quarterly growth we reported last month.

Of the major centres, Tauranga takes over from Wellington as the top performer at 10.2% quarterly value growth, up from 7.8% last month. Wellington remains close behind at 10% quarterly growth, down from 10.8% in April.

“There’s certainly plenty of signs that the heat is coming out of the market now since the March tax announcements, with a combination of investors taking a breather, first-home buyers exercising more caution and the seasonal downturn that normally accompanies the approach of winter, all contributing to a slowing market,” he said.

“But the market fundamentals are still strong with a supply shortage, combined with cheap money, still driving albeit-slowing value growth. Talk of interest rates potentially rising later next year, coupled with some dire price predictions from the Reserve Bank and Central Government doesn’t seem to have affected the market as much as they’d have hoped. We’ll likely see a continued slowing in the rate of price increases over the coming months as the property market finds its new normal,” Mr Nagel added.



House prices have risen by an average 2.3% across the Auckland region in May − slightly down from the 3% value growth we reported in last month’s QV House Price Index − with the average house price now sitting at $1,336,800.

The average house price is considerably higher in Auckland’s central suburbs ($1,561,967) of course, where house prices have increased by 7.8% this quarter and 20.5% over the last 12 months. The average house price on the North Shore ($1,515,971) has also increased by 7.6% this quarter and 19.6% over the past year.

But the capital gains have been biggest on average where house prices are below the regional average, with Papakura (10%) leading the way this quarter, followed by Waitakere (9.2%), Manukau (9.1%), Franklin (8.7%) and Rodney (8.2%). In the past 12 months, house prices have risen most in Papakura (25.9%) and Waitakere (23.9%).

Local QV senior consultant Rupert Yortt commented: “The market has shown continued signs of strength − although some unrealistic buyer expectations have led to passed-in properties at auctions becoming a more common sight, as well as the use of negotiation as a sales method.”

“Our Auckland consultancy team has noted low supply levels are keeping prices up, while prime development sites − anything appropriately zoned and over 600m² in size − are continuing to attract the highest levels of demand. First-home buyers are also still very active.”


House prices continue to push skyward in Whangarei, where the average value of a home now stands at $737,019 − an increase of 10.6% for the quarter, and 26.2% higher than 12 months ago. However, the QV House Price Index did record a drop of 1.1% in monthly price growth from April to May this year.

Meanwhile, around the region, house prices have increased by an average 24.3% in Kaipara over the past 12 months to an average $762,816. In the Far North, the average house price has climbed 18.7% over the past year to $615,953.


The average price of a home in Tauranga has cracked $1 million for the first time.

House prices here have increased by an average 10.2% over the past three months and 27.8% over the last 12 to post a new record-high average of $1,021,141, making Tauranga one of New Zealand’s hottest cities currently for property value growth.

Despite this, QV property consultant Derek Turnwald said there was growing evidence of declining investor interest. “In the past, investors have taken 3-4 months to react to major policy changes that impact upon them. So investor attitudes are likely to be clearer by late winter or early spring time,” he said.

Meanwhile, real estate agents have reported receiving less enquiries from New Zealanders living overseas, which Mr Turnwald said is a possible consequence of vaccine rollouts and increased confidence that there is an end in sight to the worst effects of the Covid-19 pandemic.

“The Australian economy is gaining momentum again, which may attract Kiwis back over there. US and UK vaccine roll outs are going well and many highly skilled workers may be attracted to higher salaries in these countries also,” he added.


The average price of a home in Hamilton is now $810,633 − a significant 24.5% higher than at the same time last year. House values increased by an average of 2.3% last month, down from 3.2% the month before.

At 9.3% growth for the quarter, house prices in Hamilton’s south east have risen the most since the beginning of March this year, followed by the north east (8.5%) and north west (8.4%). The smallest amount of house value growth this quarter was in central Hamilton (5.4%).

Across the wider region, house prices in the Waitomo district have experienced the most growth on average, rising 35.5% in 12 months. However, it’s worth noting that, at $357,794, it has a much lower average house price than anywhere else in the region. In Taupo, the average house price has increased 33.5% over the last 12 months to $777,198.

Local QV property consultant Jarrod Hedley commented: “Agents are reporting good interest in residential properties across the region but not at the same levels as experienced earlier on in the year. Areas where demand and value increases have been heightened in the last few months are now seeing purchasers move towards more affordable options, with places such as South Waikato, Waitomo and Otorohanga seeing higher increases in value as a result.”


The average price for a home in Rotorua is now $677,935 − 18.6% higher than it was at the same time last year, and 6.4% higher than it was just three months ago.

QV property consultant Derek Turnwald said the Government's moves to increase the bright-line test and remove interest cost deductibility were starting to show. “Agents are reporting fewer people are attending auctions and more vendors are opting for negotiated prices or tenders,” he said.

“Investor interest has definitely declined sharply in reaction to LVR changes, Brightline test extension and tax deductibility law changes. However, there hasn’t been a noticeable increase in investors selling properties yet − though many are likely waiting to see how the market responds.”

“Strong interest still exists for Rotorua lakeside residential properties. Hamurana, Lake Okareka , Lake Tarawera all have median values of more than $1 million. Matipo Heights, a suburb on the eastern periphery of the city, also now has $1 million-plus average values. Many of the properties in this suburb are elevated with lake views,” he added.


House prices continue to push skyward at a rapid rate in New Plymouth, despite a slight drop in monthly value growth − from 9% in April to 8% in May.

Registered valuer Danny Grace commented: “As we head into the winter months now we traditionally see less properties listed for sale on the market and this trend is evident again this year. Demand is continuing to outstrip supply, and we are continuing to see low levels of stock on the market.

“Anecdotal evidence from investors indicates that the recent announcements by the Government have detracted from the appeal of property investment. Anecdotal evidence from agents also indicates that first-home buyers are now being a little more cautious as a result of the announcements − though they are still very much present in the market right now.”

Meanwhile, house prices in the neighbouring districts of Stratford ($444,572) and South Taranaki ($399,153) have increased by 22.6% and 29.2% respectively over the past 12 months.

Hawke’s Bay

Local QV valuer Damian Hall says the month of May has shown great contrasts to what we have experienced in the past six to 12 months, with the rate of growth in house prices finally showing signs of slowing across the Hawke’s Bay region.

In Hastings, the average house price increased by 1.4% in the past month to $808,466 − down on both March and April’s monthly growth of 3.8% and 5.8% respectively. In Napier, the average house price increased by just 0.03% in one month to $798,824, which is considerably less than the 5.2% and 3.6% growth it experienced back in April and March.

“It’s interesting to note that Hastings has now overtaken Napier’s average house price. This could be due to strong sales in the upper quartile in areas such as Havelock North, which has recently been labelled a local ‘Million Dollar Suburb’,” Mr Hall said.

“Listing numbers have decreased and the effects of winter may be slowing the market down. New Government regulations may also be taking effect now, but there is an expectation that investors won’t remain quiet for long. Perhaps it’s a sign that Hawke’s Bay has reached its peak of sustainable growth for now,” he added.

Palmerston North

Palmerston North’s residential property market continues to rocket along with the average house price rising by 10.7% this quarter to $706,524. That value is a remarkable 33.6% higher than at the same time last year.

Local QV property consultant Olivia Roberts commented: “We continue to see growth in property prices throughout the Manawatu region − particularly in Palmerston North city. Demand still appears steady, but there has been a significant decrease in the number of investors in the market given the recent announcements regarding regulations around investment properties. Until further details on these regulations have been confirmed we anticipate this to continue.”


The latest QV House Price Index shows the average house price across the Wellington metropolitan area increased by just 1.5% in May − a significant drop from the 4.3% we recorded back in April.

However, QV senior consultant David Cornford was quick to point out that local house prices were still 9.6% higher on average than they were only three months ago. “There continues to be plenty of demand in the market and the majority of properties are selling quickly and for strong prices,” he said.

“The Wellington region certainly appears to be settling into a more stable pattern after significant value jumps late in 2020 and early this year. But there remains a significant shortage of stock and a healthy level of demand. For this reason we are unlikely to see value drops in the region anytime soon.”

With fewer investors in the market, Mr Cornford said now was a relatively good opportunity for first-home buyers to get on the property ladder. “Investors are now less active in the market and seem to be more focussed on getting a solid return as opposed to relying on value growth. Others are starting to branch out to commercial and industrial investment opportunities, which haven’t been impacted by the Government's raft of recent housing announcements.”


The May quarter was a busy one for Nelson’s residential property market, with the average house price rising 6.3% to $778,444. That figure is now 16.7% higher than it was at the same time last year.

QV senior property consultant Craig Russell said the local residential market continued to see strong prices being achieved, with most sales usually resulting in multiple offer situations. “We have heard anecdotally that the number of groups going through open homes is reducing and are typically owner-occupiers or first-home buyers, with investor presence at open homes being substantially reduced,” he said.

“We have also seen significant prices paid for vacant or near-vacant land with residential subdivision potential, as the residential section supply is limited and the process through the RMA and developing new sections is very slow,” he added.

“Sales evidence of vacant lifestyle sites indicates that mainstream lifestyle sites in established and good locations appear to be selling soundly. This reflects a number of factors, including low-interest rates, a desire to build near a main urban area but live in the country environment, and a modest supply relative to demand.”


Residential value growth has slowed within greater Christchurch for the first time since the middle of 2020 − down from 3.7% in April to 2.5% in May.

Local QV property consultant Olivia Browne commented: “While the market is still buoyant we have seen some heat taken out of it. The number of sales is down on the previous month, which may be attributed to not only a seasonal change but perhaps early indirect signs of new and re-introduced Government regulations influencing the residential market.”

“We’re still seeing a continued lack of stock available, and low interest rates are attributed to keeping value growth at this stage. Given the significant imbalance between supply and demand we may see a gradual slow in value growth across the region over the coming months.”

The average price of a home in Christchurch is now $639,868, which is 9.3% higher than it was just three months ago. During that time, house prices in the hills have increased by 11.3%, with Christchurch’s southern suburbs going up in value by an average of 10.9%.

Across the whole Canterbury region, house prices have increased by an average of 21.9% since this time last year, with Hurunui (26%) Christchurch city (23.8%), and Waimakariri (19%) occupying the top three positions on the annual growth charts.


QV area manager Tim Gibson says it’s too soon to say whether Dunedin’s red-hot residential property market is finally starting to cool, despite the city’s house price growth dropping from 2.5% in April to just 0.9% in May.

“We have had a drop off in job requests for finance, which could be a sign of things cooling down,” he said. However, Dunedin’s average house price ($665,130) remains 5.2% higher this quarter than last and 18.5% higher than the same time last year, with the greatest amount of value growth occurring on the peninsula and coast.

Meanwhile, Mr Gibson noted that the submission stage for Dunedin City Council’s proposed variation 2 to its Second-Generation District Plan (2GP) had just ended. This change, if it stands, will enable additional housing capacity through specific rule and policy changes and through rezoning specific sites.

“This variation zoning change is most prominent within the central Dunedin suburbs of Mornington and Roslyn, through to Maori Hill, where now almost the entire suburbs have been identified as potential to be rezoned,” he said.

“We’re already seeing evidence of a low number of sales starting to filter in where potential land banking or speculating that the zone change will occur is the motive to purchase.”

Queenstown Lakes

The latest QV House Price Index shows a 5.3% rise in Queenstown’s average house price this quarter − a slight drop from the 6.1% we reported last month. It now sits at $1,385,848.

While analysts predict that interest rates look stable for now, QV property consultant Greg Simpson said there is a growing expectation of higher interest rates in the next 18 months, which would have ramifications for all property owners, as well as tenants.

“Property management firms report that the residential tenancy market has stabilised for now, with rental levels appearing to find a stable equilibrium,” he said. “Meanwhile, the cumulative effect of the Government’s recent measures to combat rapidly rising house prices will likely be steadier house price rise growth and boosted house price construction in the next year or two.”


Invercargill’s rapid house price growth cooled slightly in May, dropping from 3% in April to just 0.9% in May. However, the city’s average house price ($440,590) remains 14.3% higher than at the same time last year.

Local QV property consultant Andrew Ronald commented: “Although price levels appear to be stabilising, we’re continuing to see strong demand across all price ranges within the Invercargill market. There was markedly less investor activity over April and May, but there have still been high numbers of first-home buyers competing for properties."

Provincial centres, North Island

Tararua tops the list of provincial centres in the North Island this month with its average house price increasing by 23.3% this quarter to $422,224. It’s followed by Carterton on 18.1% and Waitomo (17.7%).

Over the past 12 months ending 31 May 2021, house values in Wairoa have increased by a frankly astonishing 49.2% − the most nationally by far. It’s followed by South Wairarapa (39.7%) and Whanganui (37.7%).

Provincial centres, South Island

In the South Island, Kaikoura leads all provincial centres this quarter with an average house price rise of 14.8%. Hurunui isn’t far behind on 14.3% price growth over the past three months, with Grey District in third-place on 13.4%.

Buller tops our list once more for annual house price growth at 36.1% since the same time last year. It’s followed by Marlborough (29.8%) and Grey District (29.3%).

You can now view and keep track of all these value movements and more via our interactive QV House Price Index.