'Auckland effect' spreading: QV
Smaller cities and provincial centres are starting to pick up some of Auckland’s property market momentum, the latest QV statistics show.
Tuesday, February 3rd 2015, 12:00PM
by The Landlord
The latest monthly QV Residential Price Movement Index shows that nationwide residential property values for January have increased 5.7% over the past year and 2% over the past three months.
The Auckland market has increased 11.6% year on year, 5.1% over the past three months and 41.9% since 2007. When adjusted for inflation values are 10.7% over the past year and are 21.3% above the 2007 peak.
QV spokeswoman Andrea Rush said the nationwide value increase was being driven by Auckland.
But she said other centres were starting to show increases in value, too.
"Following a big month of sales in December there remains a shortage of properties listed for sale and this is continuing to put pressure on values and also on buyers, particularly in Auckland and Hamilton where many who are keen to buy cannot find a suitable property. Interest rates have come down again and there have been suggestions a possible lowering of the official cash rate this year could make borrowing even more affordable. However, for first home buyers, the requirement for a 20% deposit due to the LVR restrictions is still too great a hurdle for many.”
Of the Auckland regions, Auckland City-south had the biggest increase in values in January, up 7.9% over three months and 14.1% year-on-year.
Papakura was up 7.3% over the three months to January and North Shore-Onewa was up 7.1%.
Auckland valuer James Wilson said: “There is a severe shortage of listings across Auckland and we are getting reports that people are cautious about selling their homes without first securing somewhere else to move to.”
He said there was strong demand for new housing developments where LVR restrictions did not apply.
Residential property values in Hamilton City increased by 2.6% over the past three months 3.5% year on year and they are now 3.3% higher than the previous peak of 2007.
Valuer Nicky Harris said: “There have been reports of Aucklanders looking for property in Hamilton. This is mainly investors adding to their rental portfolio but there have been some reports of people considering commuting from Hamilton to Auckland, or making a complete move to Hamilton as it offers more affordable housing.”
Home values in Tauranga City have increased by 1.3% over the past three months, and 4% year-on-year.
In Wellington, values increased 1.3% over the past three months and 0.8% year-on-year.
In Christchurch City, prices increased 1.7% over the past three months and 3.4% compared to January 2014. They are now 24.3% higher than in the previous peak of 2007.
Residential property values in most provincial centres are increasing, with the exception of Gisborne and Wanganui and the West Coast Districts of the South Island.
In the North Island, the Auckland effect is helping values increase to the north and south of the Super City with residential property values Kaipara District rising 5.7% since November alone and 6.8% year; and values in the Franklin District also up 1.7% over the past three months and 8.6% year-on-year.
In the South Island, value increases have generally been at a slower rate and some areas are showing decreases. Invercargill City is showing upward movement in values increasing 1.9% over the past three months and values are now 0.7% higher than this time last year. Values in the Marlborough District were also up 0.6% over the last three months and 1.6% year on year and Timaru District saw values increase 1.9% over the past three months and 5.9% year on year.
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