New year brings strong start to the property market
The latest QV House Price Index data for January shows the property market has picked up where it finished off last year with all the 16 major cities we monitor showing quarterly value growth. This is the second consecutive month this has occurred, which hadn’t previously happened since November 2018.
The average value nationally has increased 4.4% year on year and is now $714,747. This represents an increase of 2.5% over the past three months. The average value in the Auckland Region sits at $1,049,383, up 1.7% over the last quarter, and up 0.3% year on year.
QV General Manager David Nagel said “January is generally a quiet month in real estate with most of us spending time with friends and families. But while the volumes of transactions has been low, there’s still plenty of interest from potential buyers looking at the limited stock on offer. This steady demand from right across the spectrum of buyers, coupled with the shortage of listings has meant values are continuing rise”.
“New listings started to increase toward the end of January around most of the country, however overall listings are reported to be down on the same time last year, which suggests the current trend of steady price growth is likely to continue in the short term”, says Mr Nagel.
“Of the main centres, Dunedin continues to out-perform the rest with quarterly value growth of 8.4%, followed by Hamilton and Wellington with quarterly growth of 4.1% and 3.6% respectively. Dunedin has recorded annual value growth of 20.8% followed by the Wellington region at 9.0% value growth”, says Mr Nagel.
“What’s of more interest is the first significant quarterly growth observed in Christchurch which recorded 2.1% value growth in the past three months, building on the strong December data. Auckland City also continued its resurgence from late 2019 with quarterly value growth of 1.7%. This has contributed to the first positive year-on-year growth for Auckland since late 2018 at 0.3%”, he says.
Of the smaller cities, Gisborne and Whanganui are the top performers recording annual value growth of 25.7% and 23.7% respectively. For the regions, the central North Island locations of Ruapehu, Rangitieki, Manawatu and Kawerau experienced annual value growth ranging between 20-30%, while Clutha District recorded the strongest annual value growth in the South Island at 25.3%.
A full breakdown of the QV House Price Index figures for January 2020 is available by clicking here
North Shore values dropped -0.5% in the year to January 2020 rising slightly by 0.6% over the past three months. The average value there is now $1,196,276. The former Auckland City Council central suburbs increased 0.9% year on year and 2.4% over the past three months and the average value there is now $1,245,323.
Waitakere values rose by 1.1% year on year, rising 1.9% over the past three months. Manukau values rose by 0.4% year on year, rising 1.6% over the past three months; Papakura values increased 2.7% year on year and 1.6% over the last quarter and the average value there is now $714,610; Franklin values increased by 0.3% year on year and Rodney values were up 0.1% year on year.
The picture being painted throughout the wider Auckland market is similar to December with few listings fuelling good levels of competition, large open home attendances and steady to slightly increasing values says Auckland QV Senior Consultant Rupert Yortt. “With the market taking a bit of a break in January, the bulk of listings are just beginning to come on which may ease the pressure slightly although we expect the positive sentiment to remain for the foreseeable future.
South and West Auckland have both seen good growth over the past quarter with 1.6% and 1.9% value growth respectively. Investors are certainly becoming more evident in these areas since the OCR cuts last year. The North Shore continues to lag behind the other parts of Auckland with 0.6% growth over the last quarter, although anecdotal evidence suggests asking prices are up slightly and demand for sections is starting to improve after a relatively inactive 2019.
The rental market is also showing positive signs with minor rent increases being noted throughout the region. Property managers have indicated that the upcoming edition of the America’s Cup is already having an effect on the market with properties being sorted in advance for crews starting to set up base from July this year.”
Hamilton City home values increased by 4.1% over the past three months and increased by 6.7% in the year to January 2020.
Jarrod Hedley, QV Senior Consultant says “Hamilton City has started off 2020 strongly with 512 sales recorded in January, resulting in a 2% increase in the median value from December 2019, now sitting at $616,316. Sales occurred evenly all across the city with buyers being active in every property type and class. In particular, Hamilton – South East has risen 3.5% over the last month which may have been influenced by investment properties becoming available coinciding with the start/end of tenancies before the new university year.
Thames-Coromandel and Matamata-Piako have also had strong sales volumes with 204 and 148 respectively. Morrinsville in particular, is experiencing positive growth in values due to the overspill from higher priced Hamilton and Cambridge areas which are currently experiencing affordable housing stock pressure. Morrinsville’s central geographic location and ongoing recent residential/lifestyle subdivision will continue to keep the local market buoyant and it will be interesting to see how similar sized regional markets respond to increased activity from all across Hamilton and the Waikato.
growth was seen in Tauranga with values increasing by 1.6%
over the last quarter and 6.6% over the last 12 months. The
average value is now $769,958.
Values across the whole Wellington Region rose 5.7% in the year to January 2020 and increased 3.0% over the past quarter and the average value is now $864,753. Upper Hutt showed growth of 15.0% in the past 12 months and now has an average value of $612,355.
It’s been a buoyant start to 2020 for the Wellington property market with values continuing to increase, a result of limited stock on the market and strong buyer demand, says QV Senior Consultant David Cornford.
“A bit more stock has come on to the market over the last two weeks however, demand continues to strongly outweigh supply in the capital city. All price levels are seeing value increases however; the largest increases are being seen at the entry level of the market.”
“Investors are active and looking for
opportunities. The rental market is extremely tight in
Wellington at this time of year as people flock to the city
for job and education opportunities. People with bad credit
history or lacking strong references are finding it
extremely difficult to secure accommodation and there is
upwards pressure on rents throughout the region.”
Nelson / Tasman
Nelson residential property values rose 6.6% in the year to January 202 and 2.8% over the past quarter. The average value in the city is now $650,331. Meanwhile, values in the Tasman District have also continued to rise, up 4.8% year on year and 0.5% over the past three months. The average value in the Tasman district is now $620,331.
The residential market continued to rise through 2019 driven by an increasing population and stimulated by low interest rates. QV Consultant Geoff Butterworth says “The 2.8% increase over the last quarter reflects the confidence in the market and the drivers behind it. The supply of residential properties appears to be slightly down and this is more noticeable in Nelson than in the Tasman District. Several new residential subdivisions are underway but there is the usual time delays due to limited available residential land, resource consent process and then the time and significant cost of developing the land ready for housing.”
“Overall the market remains strongest in the main residential centres of Nelson City and Richmond, plus smaller townships of Motueka, Mapua, Brightwater and Wakefield. The market is more subdued in areas such as Golden Bay and Murchison due to a more subdued demand and adequate supply of housing.”
Christchurch residential property values have remained relatively stable increasing 2.7% year on year to January 2020 and 2.1% in the past three months. The average value of a residential property in Christchurch now sits at $510,575.
There have been encouraging signs that there is an increase in demand for property in the hill suburbs that is having a positive impact on value says QV Senior Consultant Kris Rogers. “The hill suburbs have experienced relatively subdued growth in recent years but sales have indicated an increase in value of 5% in the last 3 months and 4.2% in the 12 months to January.” The average sale price in the Christchurch hill suburbs is now $703,901.
The Waimakariri and Selwyn districts have remained stable with modest growth year on year to January 2020 of 2.1% and 0.7% respectively, with both districts having a 0.3% increase in the past three months. The average value of a residential property in the Selwyn district is $558,728 with the Waimakariri District now $457,729.
Dunedin residential property values rose 20.8% in the year to January 2020 and by 8.4% in the past three months. The average house value in the city is now $527,101.
QV Senior Consultant Tim Gibson notes significant interest in all levels of the residential market. “We have seen some significant growth at the top end of the market with higher demand for $1.5 million plus properties, driven by regional confidence and low interest rates.”
“New local and out-of-town investors are entering the market as are more young investors. There is also significant growth for small 2 bedroom units as people look to downsize”, he says. “To increase the likelihood of their offer being accepted, potential purchasers are now placing emphasis on non-conditional offers, completing due diligence following acceptance.”
The positivity within Dunedin is being driven by long term projects such as the Dunedin hospital rebuild” says Mr Gibson.
Provincial centres, North Island
Kawerau leads the way in quarterly growth, up 18.8%, followed by Ruapehu 13.5% and Rangitikei 9.7%. In terms of annual growth, Rangitikei leads the way, up 28.0%, followed by Gisborne 25.7% and Whanganui (23.7%).
Provincial centres, South Island
Clutha leads the South Island in quarterly growth, up 10.9%, followed by Waimate 9.9% and Dunedin 8.4%. Clutha leads the way in annual growth, up 25.3%, followed by Dunedin 20.8% and Waimate 18.5%.