NZ home values increase at 14% annual rate in September

Tuesday 04 October 2016 12:12 PM

NZ home values increase at 14% annual rate in September, QV says

By Tina Morrison

Oct. 4 (BusinessDesk) - New Zealand residential property values increased at a slower pace in the year through September, as Auckland gained at a more subdued rate.

The average value of a New Zealand home rose 14 percent to $619,660 in September from the year earlier, slowing from a 15 percent annual rate in August, according to state-owned valuer, Quotable Value.

Growth in Auckland house values slowed to a 15 percent annual pace in September, from 16 percent in August, taking the average value in the region to $1.03 million. The rate of growth in Auckland peaked at 24.4 percent in November last year, and has since slowed following the introduction of tighter lending restrictions by the Reserve Bank.

New Zealand's housing market has been bolstered by record migration as more people compete for a limited supply of housing at a time of record low interest rates. Concern about the bubbling housing market prompted the Reserve Bank to extended its mortgage lending restrictions on Auckland property investors to the rest of the country, requiring a bigger deposit and reintroducing a uniform national cap on highly leveraged owner-occupier mortgages. The major banks responded to the RBNZ's July announcement by adopting the new rules early, ahead of their official introduction this month.

"We have seen a stabilisation of prices in parts of Auckland since the new LVR rules, requiring a 40 percent deposit from investors purchasing existing housing stock, were imposed," said QV spokesperson Andrea Rush. Demand had increased in the city for properties with higher density development potential, and activity remained strong for properties above $1.5 million, and for new buildings where the 40 percent LVR restrictions didn't apply, she said.

Rush said values continued to advance in many main centres.

Values in the Wellington region accelerated at a 21 percent annual pace in September, ahead of August's 17 percent pace. In Wellington city, the average value rose at a 21 percent annual pace to $661,927.

In other urban centres, Hamilton values jumped 27 percent to $529,236, Tauranga rose 28 percent to $644,297, Dunedin lifted 12 percent to $339,201, and Christchurch edged up 4.4 percent to $495,723.

.Values soared the most in the Queenstown Lakes District, up 31 percent to $959,282 from the year earlier.

"Many regional centres around the country also continue to experience strong value growth with Western Bay of Plenty, Rotorua, Kawerau, the Hauraki District, Whangarei, Napier, Hastings and Nelson markets some of the stand out regional performers," said QV's Rush. "The only areas to see a decrease in values over the past year were the South Island West Coast districts of Buller, Grey and Westland and South Western suburbs of Christchurch."

(BusinessDesk)

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