One million dollar city

Auckland’s average residential value passed the $1 million mark to hit $1,013,632, according to QV’s monthly House Price Index*.

This means that Auckland values increased by 6.1% over the past three months and by 15.9% year-on-year and are now 85.5% above the 2007 market peak.

Once adjusted for inflation, the average Auckland value went up by 15.4% year-on- year, leaving it 57.5% higher than in 2007.

Despite the rise in values, there are indications that the market might be cooling.  

QV general manager Jan O’Donoghue said there has been a noticeable easing in market activity across Auckland over the past couple of weeks.

“More homes are passing in at auction, or receiving no bids although properties are still selling post auction by negotiation.”

She said they saw a similar trend about this time last year when LVR’s requiring a 30% deposit were announced for investors in the Auckland region.

“So it’s most likely this change in the market is being caused by the latest LVR restrictions requiring a 40% deposit by investors, as well as the continued lack of stock listed for sale in the market.”

However, a shortage of listings and lower sales volumes has not impacted on value growth as yet values are still increasing, O’Donoghue said.

QV’s data shows that values have continued to rise nationwide.

The average national value increased by 6.0% over the past three months and by 14.6% year-on- year to hit $612,527.

This is 47.8% above the 2007 market peak – although, once adjusted for inflation, the average national value went up by 14.2% year-on- year, which left it 25.6% higher than in 2007.

But the Auckland story of easing market activity, despite a rise in values, was replicated in a number of markets around the country.

QV national spokesperson Andrea Rush said that, following a strong surge of activity in June and July, it appears the new LVR restrictions also started to impact on the Tauranga and Hamilton markets during August.

“In recent weeks there has been a drop off in market valuation requests, auction clearance rates, open home attendees and loan application rates in these centres.”

None the less, Hamilton’s average value was up 8.4% over the past three months and up 29.3% year-on-year to hit $518,387.

Tauranga’s average value has gone up 7.0% over the past three months and 28.5% year-on-year to reach $633,638.

Meanwhile, the Wellington market bucked the cooling trend somewhat, Rush said.

“Wellington continues to see strong growth with values there increasing at a faster rate than the Auckland region over the past year.”

The average value in Wellington is now $536,065 which is an increase of 6.2% over the past three months and 17.2% year-on-year.

Rush said the Dunedin market also continues to show strong levels of activity and demand.

“Some regional centres have also seen significant value growth of more than 25.0% over the past year. These include Whangarei, Rotorua and Queenstown.”

Conversely, the Christchurch market remains relatively flat, Rush said.

“A shortage of listings in the market is resulting in not much activity - apart from in the new build and sub-division part of the market.”

*New data released by Homes.co.nz today also showed that Auckland’s average house price now comes in at the million dollar mark. Their data has the average price at $1.03 million.