House price growth slows, led by super city

Auckland led the slowdown, with a drop in average values of 0.4% over the past three months and annual growth of 10.7%, the slowest rate since 2014.

QV spokeswoman Andrea Rush said the property market was still constrained by the most recent round of loan-to-value restrictions.

Investors made up 39% of sales but she said that figure was being propped up by those who did not need a mortgage.

Sales picked up in March compared to February but were at the lowest level for a March month since 2014.

Across Auckland, values on the North Shore, Waitakere, in parts of Manukau and Auckland City central suburbs decreased during the quarter, while values continued to rise in Papakura, Franklin, Rodney and Waiheke Island.

QV Auckland homevalue manager James Steele said: “Demand is still down as tougher lending restrictions continue to make it difficult for buyers requiring a mortgage to obtain finance for their purchases.

“However, cash buyers and those who are able to obtain funds, or are able to use equity built up over the past five years of substantial growth, are out hunting for good deals.

“Well-presented properties in decent locations are still selling well although it’s taking a little longer than when the market was very hot and properties which are in poor condition or have issues are sitting around for a lot longer if vendors are unwilling to negotiate on price.”

In Hamilton, values were up over three months and 14.4% for the year but QV said it seemed to have lost some of its momentum.

“With the heat now having come out of the market, auctions have become the less attractive course of action when selling a property with more properties being passed in at recent auctions," said Hamilton valuer Stephen Hare.

“In turn listing prices or negotiations are becoming the more desirable option with people less inclined to take that risk of selling by auction in the current market. This also enables first-home buyers to do more due diligence once a contract has been entered. There are reports that there is a shortage of rental property available in Paeroa, Thames and Matamata.

“The key driver of this is new home-owners/occupiers buying up portions of rental stock and this pressure has in turn created more demand for rental properties, thus driving prices up steadily. This is becoming a growing trend throughout small towns within the Waikato region.”

Tauranga's growth had been slowing since tighter lending rules were introduced for investors last year, QV said.

Values rose 17.5% over the year but only 0.9% over three months.

“Some agents are even reporting a softening of values for investment properties which is likely to be due to some investors finding it more difficult to gain finance to purchase with the higher deposit requirements," valuer David Hume said.

Wellington's average value topped $600,000 for the first time. Its values are up 21.2% year-on-year. 

The Hutt Valley is still accelerating with Lower Hutt values up 25.1% year on year and 4.3% since February; Upper Hutt is up 26.6% year on year and 2.8% over the past three months. Porirua values are up the most over the past three months rising 5.5% since February and 24.4% year on year. The average value there is now $510,853. Meanwhile, values on the Kapiti Coast are also continuing to rise up 20.9% year on year and 1.8% over the past three months.

“Value growth has remained fairly consistent over the past month and Porirua has again seen the greatest value growth in the region, followed by Upper and Lower Hutt," said valuer David Cornford.

"Value growth in these areas is supported by a strong first-home buyer presence in the market while the Wellington City has market has slowed slightly as first-home buyers continue to turn to Porirua and the Hutt valley as they provide a more affordable option.

“The number of listings has increased and this is providing buyers with more choice which has taken some of the heat out of the market. Also, investors requiring finance are less active in the Wellington city market since the introduction of LVR restrictions last year due to the higher deposit required.”

Christchurch's values also wobbled over the three months, and were up just 1.4% over 12 months.  Valuer Daryl Taggart said the market appeared to be flat-lining despite a lot of building going on.

Dunedin was also buoyant, as were most regions around the country. The only areas in the North Island to see values decrease over the past three months were parts of Auckland, Stratford and Waitomo.

The only area in the South Island to see values decrease over the past year was the Grey District where values were down slightly by 0.1% and over the past quarter values dropped in parts of Christchurch as well as the Grey, Hurunui, Selwyn, Ashburton, Timaru, Waimate, and Clutha Districts.