NZ property values rise at fastest pace in 9 months in March
NZ property values rise at fastest pace in 9 months in March: QV
By Suze Metherell
April 1
(BusinessDesk) - New Zealand residential property values
climbed at the fastest pace in nine months in March, led by
strong demand in Auckland.
National property values
rose 7.7 percent over the past year, accelerating from the
6.4 percent increase in February, and at the fastest pace
since last June, according to state-owned valuer Quotable
Value. Auckland, the country's most populous and fastest
growing city, led the index higher, with property values
advancing 13.9 percent, ahead of the 13 percent rise the
previous month.
The National-led government wants to
increase the availability of affordable housing,
particularly in Auckland where prices have surged ahead of
the rest of the country as a lack of supply fails to meet
increased demand from a growing population. Reserve Bank
governor Graeme Wheeler earlier this year warned
policymakers the nation’s biggest city has a shortfall of
between 15,000 and 20,000 properties to meet population
growth, and the 7,500 annual consents for new building
permits is lagging behind the 10,000 it needs to address the
shortage.
“The expectation is that Auckland will
continue to accelerate while the rest of the main centres
will remain steady with values either moderately increasing,
staying flat or in some cases declining slightly," QV
spokeswoman Andrea Rush said.
The central bank is concerned that an overheated property market could lead to financial instability and has flagged the introduction of further macro-prudential tools to help cool the market, without having to raise the official cash rate any further.
“The Reserve Bank is considering tighter rules on
borrowing to property investors which it has said may now be
defined as those who own more than one property and thus
could cover any property the owner does not live in," Rush
said. “Currently close to 40 percent of all residential
house sales in New Zealand are purchased by those who own
two or more properties and the Reserve Bank’s changes
could come into effect as early as July 1 this
year.”
Demand from the Auckland market is also spilling over into nearby regions, QV said. Residential property values in Hamilton City rose an annual 3.4 percent, with houses going to auction "reaching good prices due to high demand".
“Aucklanders are still coming down to
Hamilton to purchase properties, either to move here
permanently or to invest in the relatively more affordable
homes here," QV Hamilton valuer Nicky Harris said.
"Investors are still very active in the Hamilton property
market.”
Property values in Wellington increased an annual 0.5 percent, Christchurch values rose 5.3 percent, Dunedin gained 0.6 percent and Tauranga advanced 5.1 percent.
(BusinessDesk)