Once adjusted for inflation, house values in Auckland’s red hot market have increased by 16.9%* over the past year and are now 31.9%* over the previous market peak in 2007, according to the latest QV House Price Index.
When inflation is not taken into account, Auckland’s house values have increased by 5.5% over the past three months, 17% over the past year and are 53.7% higher than in 2007.
This means that QV’s average value for houses in the SuperCity has now topped $1 million to sit at $1,003,144.
Once again, Auckland City-South recorded the region’s biggest value increase – with values up by 6.1% over the past three months and by a massive 21.4% year on year.
Auckland’s skyrocketing values also drove nationwide residential property values to a 9.2%* year on year increase in June, which left national values at 7.8%* above the 2007 peak.
QV’s Auckland valuer James Wilson said that, while market activity levels remain buoyant, the SuperCity has a severe shortage of properties listed for sale.
This was increasing competition among buyers which was further adding to upward pressure on values.
High levels of speculation are evident across all segments of the Auckland market, he continued.
“Further, there is increasing evidence of the land-banking of properties which may offer the potential to sub-divide under the Proposed Auckland Unitary Plan.”
Developers were also reporting high demand for new residential dwellings as part of ‘house and land’ packages within new developments, Wilson said.
“Buyers also appear to be willing to disregard the land tenure of a property in order to secure a well presented dwelling in a desirable locality.
“This means the traditional discount applied to cross lease property has been nearly eroded in some areas.”
QV national spokesperson Andrea Rush said looming LVR deposit and investment property tax changes also appeared to be creating some urgency among buyers wanting to purchase before the changes come into effect.
Meanwhile, reports from local QV valuers indicate a flood of Aucklanders buying property in Tauranga, Hamilton and the Western Bay of Plenty had resulted in rising values in those areas.
In Tauranga average house values were up by 7.3% year on year, while in Hamilton they were up by 4.4% year on year.
However, values in the other mains centres including Wellington, Christchurch and Dunedin continued to rise at a slower, steady rate.
In Wellington average house values were up by 2%, in Christchurch they were up by 3.2% and in Dunedin they were up by 2.6%.
Rush said there was a severe shortage of properties listed for sale across all of the main centres.
“This winter slowdown is dampening activity in some areas while in other areas the lack of listings is leading to increased competition amongst buyers which is driving values up.”
She added that sales volumes were higher than this time last year.
“High migration and the forecast of lower interest rates are fuelling increased levels of activity in the housing market in many parts of the country.”
*when adjusted for inflation
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