House prices up as Auckland leads the way

Thursday 10 January 2013

Rising property values in Auckland helped spur nationwide increases in house prices in December, according to the latest QV monthly property value index.

By Benn Bathgate

House prices are up 1.5% on the past three months, 5.7% up on the past year and 2% above the previous market peak of 2007.

“Looking back over 2012 the increase in national values was predominately driven by Auckland and to a lesser extent Christchurch,” said QV research director Jonno Ingerson.

“These were also the only two areas to have consistently increased while the rest of the country varied throughout the year.”

Ingerson said last year began with January sales 29% up on the previous year, the highest January sales numbers since 2008. That trend continued throughout the year with most months seeing sales between 20%-30% higher than 2011 and higher than any year since 2007.

However, Ingerson said some context was needed as after the 2007 peak, sales volumes were particularly low, so while volumes are now above 2008 levels they remain between 30% to 40% lower than during the 2003 to 2007 period when the market was flourishing.

“Furthermore, the increase in sales volumes was largely in the main centres, especially Auckland, as sales numbers in the smaller centres remained subdued,” Ingerson said.

He said one of the defining features of 2012 was the low number of properties on the market, with sales constrained as willing buyers struggled to find suitable properties.

“As has been the case for the past several years, quality properties in desirable areas tended to sell quickly for good prices, while properties with perceived flaws either sat on the market or needed to be discounted,” he said.

QV also emphasised the fact that the national increase of 5.7% over the past year did not signify increasing value across most of the country, but rather increases in Auckland.

North Shore, Waitakere and Manukau all increased by 8% to 9% while values in the old Auckland City increased by 11%.

Across most of Auckland values are now well above the previous market peak of 2007.

In Christchurch values also rose slightly higher than the national average, driven by post-quake demand for undamaged homes, with some areas surrounding Christchurch about equal to Auckland in value growth.

However, the general trend for the rest of the main centres was a flat start to the year, growth around mid-year, then a faltering finish.

As a result, most were little more than flat, with Dunedin increasing the most at 2.9% and Tauranga ending the year 0.3% down.

Across the provincial centres 2012 values mostly rose, though well below the national average.

Palmerston North increased the most at 3.6%, followed by Queenstown Lakes at 2.9%. Whangarei dropped slightly in value while Gisborne slid for much of the year, ending 5.3% down.

QV says the outlook for Auckland in 2013 looks set to see no let-up in demand for housing in the short term, with values likely to continue rising, particularly in the middle value range.

Wellington looks set to remain flat while Christchurch values are predicted to continue increasing as demand continues to outstrip supply.

QV said the rest of the country would remain variable in response to local economic conditions, but in most areas values will remain relatively flat.

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