09 June 2015
Andrea Rush, QV National Spokesperson
The latest monthly QV Residential Price Movement Index shows that nationwide residential property values for May have increased 9.0% over the past year and 3.1% over the past three months. This means they are now 24.1% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 8.9% and values are now 6.5% above the 2007 peak.
The Auckland market has increased 16.1% year on year, 5.4% over the past three months and 51.6% since 2007. When adjusted for inflation values are 16.0% over the past year and are 30.0% above the 2007 peak.
QV National Spokesperson Andrea Rush said, “The steepening line of the national index reflects value increases across all of New Zealand’s main centres over the past three months with the exception of Wellington which is showing a slight decrease.”
“National residential property values have risen at their fastest annual rate in 15 months and the Auckland market continues to drive this as it continues its meteoric rise with values in the Super City region rising at the fastest annual rate since mid-2004.”
“The usual winter downturn does not seem to have dampened demand as high net migration, relatively low interest rates and a constrained housing supply continue to fuel demand in the Auckland market.”
“This demand is also now spreading to provincial centres nearer to Auckland with values up in Tauranga, Hamilton, Cambridge, Pokeno and towns in the Hauraki District.”
“The annual rate of value increases in Christchurch is continuing to slow which is further evidence that the supply of repaired and newly built homes on the market is now starting to meet demand for homes there.”
“As yet there has been no obvious impact on the market from Reserve Bank’s proposed changes to deposit requirements for Auckland investment properties or the government’s re-classification to investment property taxes due to be brought in on October 1.”
Home values across the Super City region have continued to soar over the past three months and Auckland City-South posted the highest annual increase with values rising a massive 20.2% year on year and 6.2% over the past three months alone.
Auckland City – East values were also up by 5.5% over the past three months and 18.2% year on year and Auckland City – Central values also rose 5.5% over the past three months and 12.9% year on year.
Waitakere City values also saw significant increases, up 6.4% over the past three months and 17.8% year on year. While Manukau-North West values rose 5.2% over the past three months and a whopping 19.2% year on year; Manukau-East values also increased 5.8% since March and 14.4% year on year; and Manukau-Central values rose 6.2% since March and 15.9% year on year.
On the North Shore, values in North Shore-Onewa had the greatest increase up 5.6% over the past three months and 17.5% year on year; North Shore-Coastal values increased 4.9% since March and 13.6% year on year; while North Shore–North Harbour values rose 6.2% over the past three months and 14.1% since May 2014.
Papakura District values also rose significantly as people look further out for affordable housing within the new developments there with values there up 6.6% since March and 17.4% year on year.
Rodney District home values also increased but at a slower rate than other areas of the Super City with home values in Rodney – Hibiscus Coast rising 2.2% since March and 7.9% year on year; and Rodney North home values up 3.6% over the past three months and 8.4% year on year.
QV homevalue Auckland Registered Valuer James Wilson said, “We have yet to experience the traditional ‘winter slowdown’ of sales prices or volumes and activity in the Auckland market remains strong.”
“There’s still a shortage of listings and the number of days properties are taking to sell remains low.”
“Auctions are continuing to produce good results, with high percentages of the properties exceeding expectations in terms of sales prices.”
“New builds remain extremely popular with strong demand to secure sections within new developments. The relative shortage of new sections coming onto the market within such developments has increased the popularity of existing housing resulting in strong capital growth.”
“Examples of the above are evident within the more established developments such as Stonefields where we have evidence of properties experiencing over 85% capital growth over a 5-6 year timeframe”.
“Demand for property with development potential is also strong, including large dwellings, traditionally not considered to offer viable subdivision potential now being purchased by developers who intend to demolish / remove existing improvements, sub divide and build.”
“Investors remain very active in the market, fuelled by low interest rates and strengthening prices; many are now opting to refinance and re- invest in capital upgrading across their portfolios, capitalising on historically low interest rates.”