Property growth returns to double digits

The growth rate increased from 9.8% reported in March. Over this period, the average sale price for New Zealand properties was $366,032.

The last time QV reported growth in national property values above 10% was in September 2006. QV spokesperson Blue Hancock says “The market has continued unabated over the last month on the back of stronger than anticipated migration and high levels of employment creating steady demand, especially at the lower end of the market”.

However with higher interest rates and the onset of the winter season, he expects the market to slow over coming weeks.

The most noticeable increases in property values were reported in Hamilton: 11.4%, Wellington city: 13.4%, and Christchurch: 11.8%. Auckland city and Dunedin experienced increases in annual growth compared to last month, at levels of 6.6% and 7.6% respectively.

In many provincial cities, growth in property values continued to increase above 10%. Strong performers included Hutt City: 17.7%, Gisborne: 16.9%, Upper Hutt: 15.4% and Porirua: 14.9%. Palmerston North, Wanganui and New Plymouth also grew at very healthy rates of 14.5%, 13.9% and 10.8% respectively.

Main urban areas:
Auckland:
Property values in the Auckland region grew 8.2% over the past year, up from 7.5% reported last month. The average sale price for the region was $470,798.

Glenda Whitehead of QV Valuations says annual growth rates for the Auckland region were up from last month, with the exception of Manukau and Papakura, which both eased to 10.1% but are still ahead of the growth reported in January. Increases in Auckland city property values were 6.6% for the year, up from a low of 4.5% reported in January 2007. Activity in Auckland city was very positive, with strong demand in the areas of Mt Wellington, Ellerslie, Pt England and Glen Innes, together with the eastern bays areas. The balance of districts and cities from Rodney through to Franklin showed growth rates in the 9%-12% range.

“Overall, we are seeing steady and positive market conditions in the region.”

“Our valuers continue to report good demand from buyers, reflected in a very active residential market within the low to mid-priced range. Demand in the west of Auckland continues to come from both owner-occupiers and investors. There is still good demand from buyers looking for homes to renovate or properties to subdivide,” says Whitehead. “Activity in investor areas like Otara, Manurewa and Mangere has slowed down while the market in the $400,000-$600,000 range appears to be strong, especially in Dannemora.”

Hamilton:
Hamilton’s property values grew by 11.4%, down from 12.2% reported last month.

Richard Allen of QV Valuations says demand for property across Hamilton appears to be slowing, with annual growth easing in all parts of the city. The largest decrease in growth rates was reported in southeast Hamilton, which dropped from 11.2% last month to 10% this month. Northeast Hamilton, central city/northwest Hamilton and southwest Hamilton experienced smaller decreases in annual growth compared to last month at 11.6%, 11.5% and 10.2% respectively.

Although the rate of increase in property values is easing, the average sale price in Hamilton still increased from $338,226 to $341,778. “Expectations are that sales activity will level off as we enter winter and sale prices will remain relatively static,” says Allen.

Tauranga:
Property values in Tauranga increased by 5%, up from 2.4% reported last month. The average sale price for the city was $417,116.

Annual growth in property values has effectively doubled over the past month. Shayne Donovan-Grammer of QV Valuations says anecdotal evidence suggests that there has been a surge in activity over the last six to eight weeks. “Increased activity is due primarily to sales of lower to mid valued homes, with first home buyers being a definite driver.”

“Apartments continue to perform poorly with some resale levels lower than prices paid prior to the development commencing.”

“There is restricted interest in higher valued homes,” says Donovan-Grammer.

Wellington:
Property values in the Wellington region grew by 14.7%. The average sale price for the region was $422,779.

Max Meyers of QV Valuations says this is the highest rate since QV started reporting monthly changes in the property market in February 2005. Over the same period, the rate was 13.7% in 2006 and 10.4% in 2005. The last time QV recorded annual growth above 14% across the Wellington region was in January and February last year.

The highest increases are occurring in Hutt City: 17.7%, followed by a resurgent Kapiti Coast: 16.1% and Upper Hutt: 15.4%.

Christchurch:
Property values in Christchurch city increased by 11.8% over the past year, up from 10.7% reported last month. The city’s average sale price was $348,892; a slight fall from last month’s $352,755.

Mark Dow of QV Valuations says this could indicate increased activity in the lower price brackets compared to higher price brackets, as QV’s price range statistics show the highest proportion of sales to be within the $200,000-$300,000 bracket.

The provincial parts of Canterbury and Westland demonstrate mixed trends with Hurunui, Banks Peninsula, Ashburton, MacKenzie, Waimate, Westland and Grey all recording lower annual increases than the previous month. Buller, Waimakariri, Selwyn and Timaru recorded modest improvements, says Dow.

“The current feeling is that the market is in a holding pattern.”

“The latest interest rate increases are starting to be felt by the market.”

“We would not be surprised if there was a slowing of the market, especially in the lower price brackets where mortgage affordability is a key consideration,” says Dow.

Dunedin:
Dunedin residential property values increased by 7.6%, up from 7.3% last month. The average sale price in Dunedin was $262,337.

Ian Harvey of QV Valuations says Dunedin continues to see positive increases in property values with most areas showing slightly higher growth rates compared to last month. The southern part of the city recorded the highest growth of 10.4% while other parts are experiencing growth rates within the 6%-7% range.

“Sales activity remained positive with good buyer interest, especially for the lower to medium priced properties,” says Harvey.

To compare stats online, check out the Housing statistics section on Landlords.