by Miriam Bell
Nationwide property values increased by 3.0% year-on-year, once adjusted for inflation, and by just 1.2% over the past three months, according to the latest QV House Price Index.
This was the slowest annual growth rate since August 2012 – although it still leaves the average national value at $641,648 in August, as compared to $641,280 in July.
Auckland saw its values increase by 1.0% year-on-year, once adjusted for inflation, and by just 0.2% over the past three months, which left the region’s average value at $1,041,957.
Annual values in the Auckland region are now growing at the slowest pace since October 2011.
But Auckland was not the only region to experience a decline in value growth.
QV national spokesperson Andrea Rush said quarterly value growth also dropped in Wellington (down 0.4%) and Christchurch (down 0.4%), while Dunedin value growth slowed to 0.5% over the past quarter.
This left Wellington’s average value at $605,435, Christchurch’s average value at $493,069 and Dunedin’s average value at $375,814 in August.
In contrast, values rose in most other parts of the North Island including Hamilton and Tauranga, as well as in areas benefitting from people moving out of Auckland and Wellington.
Rush said a lack of listings over winter, LVR restrictions and stricter lending criteria by retails banks have led to a 30% drop in market activity and sales volumes compared to the same time last year.
Uncertainty caused by the looming election and the crack-down by the Chinese government on the amount of capital allowed to leave the country might also be factors in the slower market.
“It’s likely the annual spring upturn in the market may be slower to arrive given the pending election,” she said.
“But with the underlying drivers of a lack of supply and high net migration particularly in Auckland still remaining, it’s possible that values may begin to rise again more steadily in the new year.”
The QV data also served to highlight the reduction in investor activity around the country.
QV’s Auckland valuer, James Steele, said lower demand for new builds in larger subdivisions in areas like Flat Bush and Albany has seen asking prices discounted particularly in areas where speculators were previously active.”
In Hamilton the market is void of investment buyers, QV’s Hamilton valuer, Stephen Hare, said.
“It is freeing up space for first home buyers who were previously struggling to compete with investors. This is resulting in a good supply of low to mid-range price bracket properties on the market.”
Hare said there was also less demand from Aucklanders in nearby regional centres like Thames and Pokeno.
The story was similar in Tauranga. QV’s Tauranga valuer, David Hume, said that investors are definitely much less active in the market than they have been during the previous two years.
Read more:
Slowdown in value growth spreading
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