It seems that the spectacular price growth seen in Auckland may have finally levelled off, with QV’s January data showing the region’s average value grew by just 0.2% over the last quarter.
This has left the average Auckland value at $1,047,699 which, once adjusted for inflation, still shows year-on-year growth of 11.3%.
However, the rate of quarterly value growth is noticeably slower in each month’s QV release: January’s 0.2% growth follows December’s 1.5% which was a drop from November’s 3.7%.
Likewise, value growth in Hamilton, which was the city which saw the most “halo” effects from Auckland’s supercharged market, is now on the decline.
Hamilton’s values decreased by 1.1% over the past three months, which has left the city’s average value at $531,337.
Nationwide, values increased by 1.4% over the past three months and, once adjusted for inflation, by 12.0% year-on-year.
This has left the average national value at $631,302.
National growth is no longer being driven by Auckland – rather it is being pushed by the strength of markets around the country, notably some provincial markets which have, traditionally, been popular with investors.
QV national spokesperson Andrea Rush said that of the main centres, relatively buoyant market conditions meant values continue to rise in Tauranga, Wellington and Dunedin.
But they are now seeing a strong trend of value growth in regional centres around the country, she said.
“It is particularly those situated within two to three hours’ drive of the main centres that have seen very strong value growth recently such as Auckland, Wellington and Queenstown.”
One such region was the Kaipara District just north of Auckland where values accelerated 6.4% over the past three months and 25.9% since January last year.
Rush said this was led by strong growth in places like Mangawhai, which is now a favourite for those who are selling up and moving out of Auckland.
The Hauraki District south of Auckland, and also commuting distance to Hamilton and Tauranga, is another such region, she said.
“Values accelerated 10.8% over the past three months and 30.3% year on year with towns like Paeroa and Ngatea in high demand from movers and investors alike.”
QV’s data also shows that buyers priced out of the Wellington and Queenstown markets are now looking to nearby regions for more affordable property.
This means values in regions like the Kapiti Coast, Horowhenua and the South Wairarapa, the MacKenzie District, Tekapo and Twizel are rising solidly.
Rush said it is possible rising mortgage interest rates, along with the impact of the new LVR rules, will continue to constrain the rate of value growth during 2017.
“However, this will be balanced by continued record high net migration and a lack of housing supply particularly in Auckland.
“Also, the fact New Zealand property can be brought freehold and has fewer taxes on property compared with many other countries means it remains a highly attractive investment to foreign buyers.”
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