House prices cooling: QV

Its latest monthly property value index shows nationwide residential values for February have increased 9.3% over the past year, and 1.8% over the past three months. 

They are now 13.1% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 7.5% and values remain below the 2007 peak by -2.6%.

The Auckland market has increased 14% year-on-year and values are 27.3% above the previous peak.  When adjusted for inflation, values are up 12.1% over the past year and are 9.6% above the 2007 peak.

But spokeswoman Andrea Rush said last month was the first sign that prices had started to level off. They are up 1.5% over the past three months in Auckland.

“This is a clear indication the LVR caps are taking effect and they appear to have led to a reduction in the rate of value growth in the residential property market.”

QV valuer Bruce Wiggins said: “The big thing in Auckland at the moment is land. We’re starting to see people invest money into attaining land where high density or development potential exists ahead of the implementation of the city’s new unitary plan.

“We’ve seen examples of this in Otahuhu, the inner North Shore and East Coast Bays. For example a property with development potential purchased in Castor Bay in February 2013 for $1.69 million reportedly resold recently for $1.99 million in the same condition.  So effectively the appreciation of value is in the land.”

Values in Hamilton city grew  1.7% over the past three months, and 5.4% over the past year. Values are 0.4% above the 2007 peak. The Tauranga city market has increased 0.5% in the past three months and values are up 3.4% year on year. The market there remains at 8.5% below the peak of 2007.

The Wellington market is continuing on the same gentle upward trajectory with house prices in the region increasing 2.9% since February last year, and up 1.3% in the last three months.

QV valuer Kerry Buckeridge said: “We have seen a significant increase in the number of properties for sale and buyers now have a lot more choice.”

QV said there were indications the rate of growth in the Christchurch market was also slowing.

Values in Christchurch city are up 11.1% year on year and 1.7% over the past three months.

Valuer Daryl Taggart said: “Rather than the post-earthquake panic where people in many cases were paying top dollar, the growth in the market is starting to slow although there are still a number of buyers and the good properties are still selling well.”

He said: “There is continued interest from investors as a result of the good rental returns - one aspect of this is a high-priced rental market in furnished homes for short term stays particularly for people having earthquake repairs done on their homes. Bare sections are still selling and builders are still busy putting up houses.”

Property values in Dunedin City are 1.7% above this time last year.

Values in the provincial centres are variable with some remaining stable, some up and some down. In the North Island, the South Wairarapa District was up 4.9% over the past year while the Taupo District decreased by 4.9% in the same period. 

In the South Island, most areas saw an increase in annual growth including Nelson which was up 3.2% and neighbouring Tasman District was up 3.8%. In Central Otago, property values increased by 7.2%, Ashburton was up 6.3% and Timaru increased 5.5%.