NZ property values rise 14% in 2015

NZ property values rise 14% in 2015; regulatory curbs slow Auckland growth

By Paul McBeth

Jan. 13 (BusinessDesk) - New Zealand property values rose 14 percent in 2015, with the annual pace slowing from a peak in November, as regulatory curbs imposed by the government and central bank took the steam out of the Auckland market, according to state-owned valuer Quotable Value.

The average value of a New Zealand home rose to $558,146 in December from $488,674 a year earlier, accelerating from the 4.9 percent increase in 2014, QV said. Values rose 2.9 percent in the three months through December, slowing from the 4 percent pace in the three months through November.

Property values have been underpinned by a hot Auckland market in recent years, where rapid inbound migration and a shortage of supply has pushed up prices. That prompted the government and the Reserve Bank to introduce new measures to quell the risk from a housing bubble. The central bank introduced Auckland-specific lending restrictions in November, while the government's more stringent enforcement of taxing speculators' capital gains began in October.

"With various government and Reserve Bank restrictions now beginning to take effect, and foreign buyers apparently much less active, our expectations are that Auckland values will drop a few percent over the next few months," CoreLogic research director Jonno Ingerson said in a statement. "While Auckland may take a breather, the surrounding areas are likely to rise, driven both by local demand and by Aucklanders choosing to live in affordable locations."

Massey University research yesterday showed New Zealand housing affordability improved in the final three months of 2015, helped in part by stalling Auckland prices, though low interest rates were seen as potentially bidding up prices.

The QV data show Auckland region values rose 4.1 percent in the three months ended Dec. 31, for an annual gain of 22.5 percent. At an average value of $933,264, Auckland values are almost 71 percent above the previous 2007 peak.

QV national spokeswoman Andrea Rush said the "massive increases" in Auckland values through the first nine months of the year were at a rate that hadn't been seen since the early 1990s, and encouraged investors to look outside the country's biggest city for potential purchases.

"This resulted in an increase in activity and demand in previously slow housing markets in upper and central North Island centres including Hamilton, Tauranga, the Waikato district, Hawke's Bay, Whangarei and Rotorua," she said.

Values in Hamilton rose 20 percent in 2015, while Tauranga was up 18 percent.

Wellington region values rose 5.1 percent in 2015, Christchurch city values increased 2.6 percent, and Dunedin values were up 5.7 percent in the year.

(BusinessDesk)

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