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Investors driving value growth - QV

Strong investor demand is driving value growth in housing markets around the country – including Auckland again, according to new Quotable Values (QV) data.

Wednesday, June 1st 2016, 12:10PM

by Miriam Bell

Residential property values nationwide continued their steady march upwards in May, QV’s latest data shows.

They have increased by 3.9% over the past three months and by 12.4% year-on-year.

This leaves the average national value at $577,829, which is 39.5% above the 2007 market peak.

Once adjusted for inflation, the annual increase dropped to 11.9%, which leaves values 18.9% higher than in 2007.

QV national spokesperson Andrea Rush said values are continuing to accelerate in many parts of the country, including Auckland once again.

“Tauranga, Hamilton, Wellington, Dunedin and Queenstown values continue to see particularly strong growth, as do many other regional centres and smaller towns located within commuting distance of these main centres.

“The Christchurch market by comparison is slow and steady with normal levels of activity and sales volumes, but little value growth as supply is now meeting demand for housing in the city.”

Rush said much of the activity is being driven by strong demand from investors.

“Migration is continuing at the highest levels seen in 100 years and this population growth coupled with growing demand from investors, means housing supply, particularly in Auckland and Queenstown, is not able to keep up with demand and this is driving values ever higher.”

QV’s May data provides yet more evidence of the resurgence in the Auckland market, following a quieter period over the summer months.

It shows that average property values in Auckland have increased by 3.3% over the past three months and by 15.4% year-on-year.

This leaves the average Auckland value at $955,793, which is 74.9% above the 2007 market peak.

Once adjusted for inflation, the annual increase dropped to 14.9%, which leaves values 49.1% higher than in 2007.

Within the region, values in Waitakere City rose the most over the past three months. They are up by 4.6% to an average of $765,019.

Rush said that if Auckland values continue to rise at the same rate during 2016, then by this time next year the average value will top $1 million dollars.

“It is clear Auckland needs more housing, both within the existing urban metropolitan boundary and on ‘future urban’ zoned land, as well as new infrastructure to service it.”

But new measures aimed at curbing investor activity in the market don’t appear to have made much of a dent in demand from investors, she said.

“It appears to be investor demand that’s driving the rapid value growth in Auckland.”

Buoyant market conditions are leading to rapidly rising values across the city, QV’s Auckland values James Wilson agreed.

He said agents are reporting a shortage of listings, with well-presented good quality stock moving increasingly quickly.

“We are also seeing numerous examples of properties transacting within short timeframes by property speculators.

“Vacant sections within new developments are extremely popular, with the on-selling of vacant sites which have been purchased off plans providing strong capital gains.”

Besides Auckland, the Hamilton and Tauranga markets continue to show particularly strong value growth.

Hamilton’s average values were up 4.9% over the past three months and 26.2% year-on-year, leaving them at $478,323.

Tauranga’s average values were up 4.9% over the past three months and 23.1% year-on-year, leaving them at $591,942.

« Defying the winter chillAuckland prices static »

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

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