Nationwide values slowly climb but buyers cautious
Nationwide values slowly climb but buyers cautious
Residential property values have continued to gradually increase at a nationwide level according to the latest QV index for September. Values are up 1.8% over the past three months and 5.3% over the past year. As a result values have now edged ahead of the previous market peak of late 2007.
Jonno Ingerson, QV.co.nz Research Director said “while nationwide values have been slowly increasing for over a year now, we need to put this into context. The rate of value increase is relatively slow, currently around 5% per year compared to the 10% to 15% we saw during the mid 2000’s”.
“The current value increase is also being driven largely by Auckland and Canterbury. If those two areas are excluded then values across the rest of the country have only increased by around 1.5% over the past year. Furthermore, although values are now just above the 2007 peak, when adjusted for inflation they remain 12% lower.”
“The number of sales in the last few months is higher than in 2010 and 2011, but the years since the global financial crisis have been characterised by very low activity. There is a lack of listings in many areas, particularly Auckland, which is also likely to be constraining sales numbers” said Jonno Ingerson.
“First home buyers and investors are definitely more active in the market now than has been the case for several years. However, in general buyers are acting carefully, doing their research and not overpaying. This is despite the lack of listings, which would ordinarily mean increased competition and prices” said Jonno Ingerson.
“Spring is usually a time when the number of listings increases as people prepare their property for sale during the warmer months. There is some evidence of this seasonal lift, but it is only slight” said Jonno Ingerson.
Values in the wider Auckland area have risen 2.8% over the past three months and 7.2% over the past year.
Old Auckland City continues to
have the steepest increase over the past 12 months, up 8.4%,
with Manukau and North Shore close behind, up 6.8% and 6.3%
respectively. The increase in these areas is reflective
over the past three months also, with old Auckland City
rising the most, up 3.6%, and Manukau up 2.8%.
Values continue to rise well above the previous peak of 2007, with the wider Auckland area up 7.8%, another 1.2% increase on last month. Old Auckland City now sits 11.2% above peak, with the North Shore 5.9% and Manukau 4.7% above. When adjusted for inflation no area has reached the previous peak, with Old Auckland City the closest at -2.8%.
QV Operations Manager Kerry Stewart said “Growth in Auckland continues, and while the volume of listings has increased we are still seeing a shortage of suitable stock for both improved properties and vacant residential land. This is leading to limited choice for potential buyers in an already heated market. As a result, further competition for quality properties that come onto the market is likely to increase”.
“With the strong, sustained period of growth recently, and the typical expected lift over the coming months, property values are not expected to slow” said Kerry Stewart.
Hamilton and Tauranga
Values in Hamilton continue to rise, up 4.1% over the last year and 1.3% over the past three months.
QV Valuer Richard Allen said “interest from investors
and first home buyers is still driving the lower end of the
market, with sales volumes and enquiry from potential buyers
in the upper end of the market is still steady. There has
been increased demand for existing vacant sites in the east
of the city causing a sharp increase in sale prices, as well
as demand from developers for high density sites suitable
for town house or multi-unit development.”
Tauranga remains relatively flat, although up 1.1% on last year.
Valuer Paul Thomas said “Local real estate agents are
reporting more movement in the market. However, apartments
are generating particularly low sales volumes with a large
amount on the market and very little demand.”
Although Wellington has seen slight increase in values over the past year, up 2.3%, the market has seen little movement during the past six months, not following the trend of the other main cities across the country.
QV Valuer Kerry Buckeridge said “People with homes priced around $550,000, who would typically be looking to move up the ladder to homes around the $750,000 mark, are sitting still at this stage. Some are actually choosing to renovate instead.”
“Substantially increased insurance premiums are affecting the apartment market, with some current owners rethinking whether they can afford to continue with apartment living” said Kerry Buckeridge.
“In some areas however, there are still good rental opportunities available, with some fetching a strong 7-8% yield. This is attracting some investors back to the market” said Kerry Buckeridge.
Christchurch values continue to rise as the rebuild gets underway and demand stays high. Over the past 12 months values have risen 6.6%, with a 1.8% rise in the last three months. Christchurch now sits 3.3% above the 2007 peak and is looking to stay strong heading towards the start of summer.
Technical Category 3 (TC3) Blue Zone properties are decreasing in value as the extent of substantial work and repairs to foundations become evident. Values of properties within this zone are approximately 3% below values seen before the earthquakes. In contrast, TC2 Yellow and TC1 Grey Zone properties, due to the lesser extent of work needing to be done, are 10-12% above pre-quake values.
QV Valuer Daryl Taggart said “typical trends seen across the previous year or so continue. Eastern areas continue to see very little interest with activity based more in the West. Selwyn and Waimakariri Districts are still considerably above values seen last year, up 12.2% and 12.9% respectively.
Values in Dunedin also continue to rise, now 5.1% up over the past year and 2% up over the past three months.
QV Valuer Tim Gibson said “spring has generated good demand for property in Dunedin with open homes receiving good turnouts. The lower to mid range properties are continuing to be snapped up if priced fairly and well presented. Many are also receiving multiple offers.”
Like most of the main cities there is now a more widespread trend of slightly increasing values in the provincial centres, at least over the past three months. A few months ago there was more variability with some areas up, some down and others flat. The exception is Whangarei where values have dropped 1.8% in the last three months.
Over the past year values have increased between 0.8% and 2.8% in Hastings, New Plymouth, Palmerston North, Nelson, Queenstown Lakes and Invercargill, with the greater changes tending to be in the north. Rotorua, Napier and Wanganui are at about the same level as last year, while Whangarei has dropped 1.7% and Gisborne has dropped 4.6%.
|Residential Property - Monthly price index|
|Time period: as at September 2012|
|Territorial authority||Average sale price|
over the past 3 months
|Property Value Growth|
Over the past 12 months
based on the QV index
|Auckland - Rodney||524,731||4.7%|
|#A||Auckland - North Shore||649,767||6.3%|
|Coastal North Shore||733,751||5.3%|
|North Shore Onewa||511,803||8.5%|
|#A||Auckland - Waitakere||422,651||5.9%|
|#A||Auckland - City||663,169||8.4%|
|Auckland City (Central)||551,479||8.3%|
|Auckland City (East)||839,891||7.2%|
|Auckland City (South)||609,347||10.6%|
|#A||Auckland - Manukau||490,828||6.8%|
|Manukau North West||447,430||5.2%|
|#A||Auckland - Papakura||378,030||4.5%|
|Auckland - Franklin||401,654||3.9%|
|Hamilton North East||432,597||4.3%|
|Central City/North West||310,460||3.1%|
|Hamilton South East||330,919||3.3%|
|Hamilton South West||316,860||4.9%|
|Central Hawkes Bay||203,961||6.0%|
|Wellington City & Southern Suburbs||529,185||1.6%|
|Central City and North||439,185||6.4%|
|#||Main Urban Areas||478,404||6.1%|
|Notes on the above data:|
|1. The information included in the above table is calculated based on the sales data entered into QV's system for the previous 3 month period. For example, information for the period ending June will be calculated based on sales entered between April 1 and June 30.|
|2. Property Value Growth is the annual % change in residential property values, calculated using QV's House Price Index methodology. The residential sales entered into QV's system for previous 3 month period are compared to the same period of the previous year to identify the annual % change in residential property values. Average Sale Prices are calculated based on residential sales entered into QV's system for the previous 3 month period.|
|3. Any of the statistical data shown in italics are calculated based on a sample set of data that is less than the recommended minimum. These results should be used with caution. Those showing N/A had too few sales to generate an index|