Market remains quiet through winter months
The New Zealand property market remains quiet through winter, with quarterly value growth remaining at 0.1%. Despite this subdued growth, many regional areas including the Western Bay of Plenty, Hutt Valley and Porirua continue to see values steadily rise, supported by a strong regional economy. Over the past year, average national property values steadily increased, up 2.2%.
Meanwhile, residential property value growth across the Auckland Region decreased by 2.6% year on year and by 0.8% over the past quarter. The average value for the Auckland Region is now $1,025,389.
For a full breakdown of the QV House Price Index figures for July please click here
QV General Manager David Nagel said, “The last month has seen a continuation of recent trends – sluggish value growth and low supply overall mixed in with pockets of strong growth.”
“The regions that continue to see the strongest value growth, such as the Bay of Plenty, Hutt Valley and Porirua, are generally those offering more affordable property in areas where the local economy provides plenty of job prospects within a commutable distance.”
“The slower rate of growth across most areas is due to a combination of factors. A key driver is affordability constraints – with high-value areas such as Auckland City having seen values increase by over 90% since the 2007 peak. This sustained period of value growth since the peak has gradually pushed many buyers out of the market. At the same time, areas such as Christchurch, with an average value of $498,006, has increased by 31.3% since the 2007 peak. It’s regions such as these that still have plenty of scope for growth in the coming years, as they continue to attract buyers seeking more affordable property.”
“Investors will certainly be adjusting to some key policy changes – namely the Taxation and Healthy Homes Bill – which have recently come into effect. We’re not noticing any major changes in investor demand recently as a result of these changes. In fact, it’s the first home buyers who appear to remain busy, as they snap up properties particularly in the wider Wellington region.”
“In the coming months, we’re anticipating no major changes in market activity. Market conditions appear to be relatively stable, with record low interest rates likely to continue supporting steady buyer demand. As per usual, as we emerge out of winter, we’re expecting a slight increase in listings and sales volumes although this won’t have a substantial impact on market trends.”
Value growth remains slow across Auckland's suburbs. North Shore values dropped 4.3% in the year to July and by 1.5% over the past three months. The average value there is now $1,171,694.
The former Auckland City Council central suburbs dropped 2.9% year on year and by 0.5% over the past three months and the average value there is now $1,209,861. Waitakere values dropped by 1.8% year on year and by 0.9% over the past three months. Manukau values decreased by 1.2% year on year and by 0.6% over the past three months; Papakura values dropped by 0.4% year on year although increased by 1.0% over the last quarter and the average value there is now $702,017; Franklin values increased by 1.3% year on year and Rodney values were down 1.0% year on year.
QV Auckland Property Consultant Hugh Robson comments on the trends seen in West Auckland
“The market continues to be fairly flat in Waitakere, which is typical in the middle of winter. In saying this, first home buyer activity remains steady.”
“We are noticing that more properties are being listed with asking prices and vendors are showing less willingness to go through the auction process.”
“Despite the slow market, renovated properties in good locations continues to sell fairly well.”
Tauranga home values rose 5.3% year on year although dropped by 0.3% over the past three months. The average value in the city is $738,277. The Western Bay of Plenty market rose 6.9% year on year and by 2.9% over the past three months. The average value in the district is now $673,793.
Hamilton City home values decreased by 0.1% over the past three months although increased by 4.8% in the year to July. The average value in Hamilton is now $584,962.
Values across the whole Wellington Region rose 8.5% in the year to July and increased 0.9% over the past quarter and the average value is now $712,681.
Wellington City values increased 6.2% year on year although dropped by 0.5% over the past three months and the average value there is now $827,177. Meanwhile, values in Upper Hutt rose 15.9% year on year and 3.5% over the past three months; Lower Hutt rose 10.8% year on year and by 2.6% over the past quarter; Porirua rose 11.2% year on year and by 3.9% over the past quarter. Finally, the Kapiti Coast rose 7.5% year on year and 1.4% over the past three months.
QV Wellington Senior Consultant, David Cornford said, “The market has been relatively quiet over the last month, however this is not unusual at this time of year.”
“Property values in Wellington City have been relatively flat over the last three months however we are still seeing value growth in the Hutt Valley and Porirua – largely driven by first home buyers.”
“Strong prices continue to be achieved particularly for well-presented properties in good locations.”
Nelson residential property values rose 6.8% in the year to July and by 0.3% over the past quarter. The average value in the city is now $623,256. Meanwhile, values in the Tasman District have also continued to rise, up 5.0% year on year and 1.9% over the past three months. The average value in the Tasman district is now $609,444.
QV Nelson Senior Consultant, Craig Russell said, “The local property market has experienced modest value level growth in recent months.”
“The high-value urban residential market, particularly in the $800,000 to $950,000 bracket, is price sensitive and often requires an extended marketing period.”
“In saying this, Section prices continue to rise with some strong sale prices recorded in the Hart Rise development in Richmond. We may also see that interest rate cuts may further fuel the property market.”
It’s a continuation of recent trends for Christchurch City, with value growth remaining modest. Values are slightly up year on year although values remained flat over the past three months. The average value in the city is now $498,006.
Dunedin residential property values are continuing to steadily rise. Values have increased 11.7% in the year to July and by 0.3% over the past three months. The average value in the city is $458,974.
QV Dunedin Property Consultant, Tom Patterson, said, “There is strong demand for residential property, with a shortage of stock continuing to force values upwards”
“Multiple offer scenarios and high attendances at open homes remain common for properties in the lower to middle price bracket. This is largely driven by investors and first home buyers who remain very busy in the market.”
Otorohanga leads the way in quarterly growth, up 12.6%, followed by Whanganui (11.2%) and Wairoa (7.1%). In terms of annual growth, Otorohanga leads the way, up 35.5%, followed by Kawerau (29.2%) and South Waikato (24.2%).
Waimate lead the way in quarterly growth, up 13.7%, followed by Central Otago (5.5%) and Buller (4.6%). Southland leads the way in annual growth, up 14.7%, followed by Clutha (14.2%) and Invercargill (13.6%).