More affordable regions continue strong growth
Most of New Zealand’s more affordable, smaller provincial towns continue to see solid value growth, while Auckland is still seeing a slight drop in value levels.
The Hawkes Bay region continues to see some of the strongest rates of growth across the country. Lower North Island provincial areas, such as Manawatu, Masterton and Carterton, are also experiencing strong annual growth rates.
Dunedin continues to see the strongest value growth out of the main centres although the Wellington market does remain busy.
The latest QV House Price Index shows nationwide residential property values have increased steadily over the past year by 3.0% and by 0.7% in the three months to February. The nationwide average value is now $686,050.
Meanwhile, residential property value growth across the Auckland Region decreased by 0.9% year on year and by 0.6% over the past quarter. The average value for the Auckland Region is now $1,044,576.
For a full breakdown of the QV House Price Index figures for February please click here
QV General Manager, David Nagel said, “Our latest figures paint a bit of a mixed picture. On the one hand, we’ve got more affordable, smaller provincial towns who are still in their upward growth stage, while the likes of Auckland are much further down their growth lifecycle and now seeing values flatten after a period of sustained value growth.”
“The rate of annual growth, nationally, has dropped from 6.5% to 3.0% over the past year, which does suggest that the heat has certainly been taken out of the market.”
“We’re seeing some interesting trends at the suburb level, where affordability constraints are seeing values slow in many higher value areas. For example, the wider Wellington region continues to see a general slowdown in the rate of growth and it’s the more affordable areas, such as Upper Hutt, which are seeing some of the highest rates of growth as first home buyers and investors seek value for money.”
“Dunedin continues to see the strong value growth out of all the main centres. With an average city value of $449,023, the area continues to attract a broad range of first home buyers and investors due to its value for money.”
“Interestingly, investors appear to remain fairly active. I’ll be closely watching how investor behaviour changes in the coming months, as we gain more certainty around the government’s stance on the recommendations put forward by the Tax Working Group.”
Value growth remains slow across Auckland's suburbs. North Shore values dropped 2.0% in the year to February and by 0.7% over the past three months. The average value there is now $1,206,744.
The former Auckland City Council central suburbs dropped 0.5% year on year and by the same amount over the past three months and the average value there is now $1,232,811. Waitakere values decreased by 0.8% year on year and by 0.9% over the past three months. Manukau values decreased by 0.7% year on year and by 1.1% over the past three months; Papakura values decreased 0.8% year on year and by 0.3% over the last quarter and the average value there is now $696,415; Franklin values remained flat year on year and Rodney values were up 0.9% year on year.
QV Auckland Property Consultant, James Steele said, “We are observing that first home buyers remain active, with values remaining stable. There is certainly a lot of discussion around the Tax Working Group’s recommended Capital Gains Tax, so it’ll be interesting to see how this impacts investor activity in the coming months.”
Values across the whole Wellington Region rose 8.6% in the year to February and increased 2.0% over the past quarter and the average value is now $699,183.
Wellington City values increased 7.9% year on year and by 2.3% over the past three months and the average value there is now $824,029. Meanwhile, values in Upper Hutt rose 13.9% year on year and 5.7% over the past three months; Lower Hutt rose 9.1% year on year and by 0.4% over the past quarter; Porirua rose 8.1% year on year and by 1.0% over the past quarter. Finally, the Kapiti Coast rose 6.9% year on year and 1.9% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “There continues to be steady demand in the Wellington region and value growth is still evident at the lower-to-mid section of the market.”
“The affordable areas, in particular Wainuiomata, Naenae, Taitia, Porirua East and parts of Upper Hutt, continue to see the greatest value growth in the region, with semi-detached flats are proving popular with first home buyers and investors.”
“Supply is still very limited and this, combined with low interest rates, is underpinning strong property prices in the region.”
“Properties priced in the 1.5 to 2 million dollar range continue to sell readily provided they are well located and well presented, however there is less price pressure at this end of the market.”
“Rents continue to increase across the region and securing rental accommodation is a challenge, particularly for those people who don’t have an excellent rental history.”
“Investors continue to be active in the market despite recent recommendations by the tax working group and new rental minimum standard rules.”
Hamilton City home values increased by 2.5% over the past three months and by 5.8% in the year to February. The average value in Hamilton is now $580,233.
QV Hamilton Property Consultant Andrew Jacques said, “The main driver or most common idea coming out of Hamilton is that there is huge demand for property under $500,000. This is due to first home buyers trying to enter the property ladder, and currently the demand outweighs supply. As such, agents are seeing a lot of competition from buyers with property going to multiple offers in well-located suburbs.”
“Agents believe that this has resulted from the change in LVR policy, and this is starting to become more prominent.”
“There remains plenty of activity around the outskirts of the northern suburbs (Flagstaff, Ridgedale) and the southern suburbs (Fitzroy), where Home and land packages are being sold.”
Tauranga home values rose 2.6% year on year and by 1.6% over the past three months. The average value in the city is $725,113. The Western Bay of Plenty market rose 4.8% year on year and 1.8% over the past three months. The average value in the district is now $652,132.
It’s a continuation of recent trends for Christchurch City, with value growth remaining modest. Values are slightly up year on year and slightly decreased by 0.1% over the past three months. The average value in the city is now $495,089.
Dunedin residential property values are continuing to rise and have increased 14.3% in the year to February and 4.0% over the past three months. The average value in the city is $449,023. The Dunedin – Taieri area experienced strong value growth, up 15.0% annually and 6.1% over the past quarter.
QV Dunedin Senior Consultant David Paterson said, “There is still strong demand for properties up to $400,000, with multiple offers a common scenario. With such demand, offers are often above expected value levels and this can cause problems securing finance. “
Nelson residential property values rose 7.8% in the year to February and by 2.4% over the past quarter. The average value in the city is now $612,081. Meanwhile, values in the Tasman District have also continued to rise, up 5.9% year on year and 2.2% over the past three months. The average value in the Tasman district is now $598,945.
QV Nelson Property Consultant, Craig Russell said, “We have seen a continuation of strong market demand particularly for entry level properties where first home buyers are competing with investors - who themselves are chasing higher rentals to offset the likelihood of modest capital growth going forward.”
“Listings in the lower-to-medium price bracket appear to have increased over the last month, possibly in part due to a number of mum and dad investors who have recognised that we may be nearing the peak of the cycle, and are looking to cash up or consolidate prior to the introduction of increased legislative and compliance costs for rentals, and a possible capital gains tax being introduced.”
“Areas such as the Wood continue to be popular with lower value properties such as flats being sought after. We have also seen good demand in fringe city suburbs such as Bishopdale and Nelson South, which have a number of homes in the $400,000 to $600,000 price bracket.”
“Rural and residential section sales have slowed up recently on the back of strong section value increases over the last few years, and the increased cost to build; which is impacting on affordability.”
Napier values rose 12.5% year on year and by 5.2% over the past three months. The average value in the city is now $549,207. Hastings values are also continuing to rise up 13.2% year on year and 9.9% over the past three months. The average value there is now $511,442.
In the North Island, Hastings leads the way in quarterly value growth, up 9.9% followed by Ruapehu (8.3%) and Central Hawkes Bay (6.0%). In terms of annual growth, Kawerau leads the way, up 28.5%, followed by Wairoa (27.0%) and Ruapehu (21.3%).
In the South Island, Southland lead the way in quarterly growth, up 7.1%, followed by Dunedin – Taieri (6.1%) and Dunedin – South (4.3%). Dunedin – Taieri leads the way in annual growth, up 15.0% followed by Dunedin – South (14.9%) and Dunedin (central), up 14.3%.