NZ property value growth perks up in April as regions offset Auckland declines
By Paul McBeth
May 1 (BusinessDesk) - New Zealand property values rose at a faster annual pace in April than in March, with regional increases offsetting a steady decline in Auckland.
Annual house price growth accelerated to 2.7 percent in April from 2.5 percent in March, though still down from the 7.6 percent pace clocked in April 2018, according to Quotable Value figures.
Auckland values declined at a 1.5 percent annual pace, unchanged from March, as the country's biggest property market continues to cool in the wake of tighter lending criteria imposed by the Reserve Bank and adopted by lenders.
However, a number of regions are registering double-digit annual growth in property values, and the Wellington region was up 8.2 percent in the year.
"We’d expect the market activity to drop as we head into the chillier winter months," QV general manager David Nagel said in a statement.
"In saying this, the Reserve Bank’s indication that they will drop the OCR rate, coupled with the so-called ‘rate wars’ taking place between banks, should mean that buyer demand remains steady."
QV's figures are for April but its index is based on settled house sales and are prepared on a three-month rolling average basis. Its data can include house sales that went unconditional as long ago as January, as opposed to the Real Estate Institute’s more timely monthly data, which records unconditional sale agreements.
Kawerau posted the biggest annual increase of 23.3 percent, albeit at a lower base where the average current value was $250,975. Tararua values were up 20.1 percent at $230,915.
The national average value was $686,975, compared to Auckland's $1,033,583. Wellington values came in at $706,123, while Hamilton was at $585,579, up 5.1 percent from a year earlier, and Tauranga values were at $740,222, also up an annual 5.1 percent.
Christchurch values increased an annual 1.3 percent to $498,105 and Dunedin values were up 13 percent at $457,530. Queenstown Lakes values increased an annual 3.3 percent $1,194,045.
QV's Nagel said the decline in Auckland property values wasn't at the level reported by some commentators, and falling interest rates will likely support underlying demand. At the same time, new supply from large subdivisions and infill housing is coming on-stream.
"We are starting to see a change in the type of properties selling with a general trend toward smaller, lower-value, one and two bedroom properties which is leading to a drop in median sales prices across the Auckland region recently," he said.