Media Release: QV Valuations, 2 August 2016
The latest monthly QV House Price Index shows that nationwide residential property values for July have increased 14.1% over the past year. Values rose by 6.1% over the past three months and are now 45.4% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 13.7% and values are now 23.5% above the 2007 peak. The average value nationwide has now ticked over the $600,000s and is $602,434.
The Waikato market has increased 27.5% year on year and 4.2% over the past three months. Values there are now 28.6% higher than the previous peak of 2007.
The Auckland market has increased 16.0% year on year and 5.2% over the past three months. Values there are now 81.6% higher than the previous peak of 2007. When adjusted for inflation values rose 15.5% over the past year and are 54.2% above the 2007 peak. The average value in the Auckland is now $992,207.
The full set of QV House Price Index statistics for all New Zealand for July can be downloaded by clicking this link: QV House Price Index (HPI) for July 2016.
“Hamilton, Queenstown Lakes and Tauranga have seen some of the highest growth with Hamilton values rising 31.5% since July 2015, nearly twice as fast as Auckland which rose 16.0% over the same period.”
“The Auckland market however has continued to accelerate up more than 5.0% over the past three months and it now has an average value just shy of $1 million dollars.”
“Meanwhile, the Wellington and Dunedin residential property markets also continue to show strong growth. Christchurch by comparison is showing much more moderate value growth and along with supply meeting demand for homes in the city, there’s now an over-supply of rental properties which is resulting in a downward trend in rents there.”
“It’s too soon to tell what impact the Reserve Bank’s new 40.0% deposit requirement for anyone purchasing a property they do not intend to live in, will have on the market. However there are reports the new rules have already led to some offers being withdrawn by investors in parts of the country.”
Raglan
“Raglan is experiencing an increase in property values similar to the rest of the Waikato district and the Hamilton market.”
“First home buyers, outside investors, local investors, other locals and holiday home buyers are all vying for properties in the popular coastal town and demand for property there is exceeding supply which is driving values up there.”
“Raglan is only 45 minutes commuting distance to Hamilton making the coastal community popular for first home buyers, families and retirees wanting the coastal lifestyle, affordability and to commute for work in Hamilton.”
Hamilton
Home values across Hamilton City continue to show massive growth, up 31.5% since July 2015 and a huge 8.9% over the past three months. The average value in the city is now $513,094. Values in the surrounding districts also continue to rise rapidly with Waikato District values up by 27.5% year on year and 4.2% over the past three months and Matamata-Piako District up 24.3% year on year and 7.3% over the past three months.
QV homevalue Hamilton Valuer, Stephen Hare said, “Hamilton City property market is currently experiencing strong demand and the supply of properties on the market is still not currently able to keep up with demand.”
“We are continuing to see strong demand for properties in the lower value price bracket ($400,000-$600,000) and increasingly strong demand in the high value bracket suburbs such as Flagstaff, Rototuna and Huntington.”
“It’s becoming a growing occurrence in this strong market for properties to go to auction compared to other means (asking price) with vendors seeking higher values through this approach.”
“Hamilton home buyers and investors continue to purchase in nearby towns within commuting distance to the city, which is driving values up in places such as Te Awamutu, Morrinsville and Ngaruawahia which are becoming more appealing to first home buyers seeking affordability and close proximity to Hamilton.
Auckland
Home values across the Auckland region are continuing on the rapid upward trend seen since April.
The former Auckland City Council central suburbs have increased by 14.6% over the past year and a huge 5.6% over the past three months .The average value there is now $1,163,464. Values in the former North Shore City suburbs were up by 15.1% year on year and 5.3% over the past three months. The average value there is now $1,160,094.
Manukau city continued to see very strong value growth over the past year with values there rising 20.0% year on year and 5.7% over the past three months, the average value there is now $859,005. Value growth in Waitakere city by comparison appeared to be slowing down a little with values there rising below the Auckland average, up 13.8% year on year and 3.7% over the past three months. The average value in the western suburbs is now $782,039.
To the north of Auckland, values in Rodney District rose by 16.0% over the past year and 2.8% in the past three months. Papakura District values rose by 21.1% in the year to July 2016 and were up by 4.9% over the past three months, while in neighbouring Franklin values rose 15.1% over the past on year and 3.3% over the past three months.
QV homevalue Registered Valuer, James Wilson said, “Throughout July, the Auckland residential market has been characterised by a severe shortage of listings which could be due to fewer people listing their properties for sale during the wet winter months and strong value growth.”
“This seasonal shortage of listings has further strengthened demand for good quality stock and homeowners appear to be favouring staying put for the time being and utilise the equity within their property to fund renovations rather than selling to upgrade.”
“Increasingly we are witnessing unconditional offers being made in order to secure a property without completing adequate due diligence. This behaviour is driven by a growing fear of missing out which is rife across the market.”
“Whilst it is still too early to have evidence of the market impact of the further strengthening of LVR restrictions announced by the Reserve Bank during July, some investors have said they are entering a ‘wait and see’ holding pattern.”
“Given the LVR strengthening, and Reserve Bank rhetoric regarding the potential of Debt to Income ratios, we would urge investors to conduct adequate analysis of the long term investment returns that any potential property can achieve.”
“The Super City southern boundary fringe districts of Papakura and Franklin are still popular among investors given the relatively strong gross returns achievable compared with more central Auckland areas.”
“Lifestyle properties are increasingly popular as buyers seek to obtain the added utility of a larger land area; those localities which are relatively well serviced and provide good access to arterial routes are experiencing the strongest demand – examples include Karaka, Clevedon, Drury and parts of Franklin.”
Tauranga
Home values in Tauranga City continue to rise rapidly up a huge 25.7% year on year and 6.6% over the past three months. The average value in the city is $615,625. Western Bay of Plenty home values also continue to show strong growth rising 24.3% year on year and 5.9% over the past three months. The average value in the district is now $540,128.
QV homevalue Tauranga Registered Valuer David Hume said, “Buoyant market conditions continue in Tauranga and the Bay of Plenty residential property markets.
“Supply cannot keep up with demand for property and there are still a lot of desperate buyers competing to buy those homes and sections that are listed for sale on the market.”
“There continues to be a severe shortage of listings and a lack of vacant sections or land available on the market.
“There is continued strong demand from local and out-of-town investors for property. We are also still seeing high numbers of people relocating to Tauranga including New Zealanders returning from overseas, people moving from Christchurch due to the earthquakes and people priced out of the Auckland market.
“First home buyers are continuing to find it very hard to enter the market and those who can manage to purchase a home, are having to drop their expectations to get a foot in the door.”
“Over the past six months it’s also become increasingly difficult for people looking for homes to rent and renters have to act quickly and compete with others to secure a property to rent while rents are rising rapidly across in the city.”