The first sign of cracks in the housing boom have appeared, though properties throughout New Zealand recorded generally good increases in value during 2004.
Monday, February 14th 2005, 2:43PM
by The Landlord
Quotable Value statistics issued today show a nationwide 13.5 per cent increase in the average house value to $273,474 for the year to January 2005.
However, some of the previously booming areas have started to slow down. QV has reported a drop in value in two areas, Nelson city and central Auckland, while other popular locations such as Tasman and Queenstown Lakes showed only marginal growth.
Those falls were balanced by generally solid growth in value elsewhere, with some latecomers to the housing boom showing big increases.
"If this trend continues, we expect to see the areas which were initially slow to follow the cycle upward will also begin to slow down," said Blue Hancock of QV's valuations unit.
The figures were issued in a new format, the QV residential price movement report. Previously, QV compiled statistics only on a quarterly basis. The new report will be issued monthly, averaging sales over the previous three months and comparing the figures with a year ago.
A slowdown in house values in the booming areas may encourage the Reserve Bank to take a more cautious approach to interest rates. The QV figures are one of the more closely watched indicators of the housing market.
Dunedin was one strong performer with values increasing on average 29.3 per cent to $224,484 for the year. The standout performers were on the coast or Otago peninsula, increasing 41.8 per cent to $191,677.
New Plymouth also showed a healthy increase of 33.6 per cent to $218,636, while eastern Taranaki had a stellar 41.9 per cent increase in average value to $107,129. Wanganui was also strong, with a 34.1 per cent increase to $123.936.
