Auckland sales down by 30% - QV

The latest QV House Price Index shows that Auckland’s quarterly value growth has plateaued at 0.0% over the past three months, leaving the region’s average value at $1,045,059 in June.

Values across the region were up by 7.2% year-on-year – but this was the slowest annual rate of growth recorded since September 2012.

Further, once seasonally adjusted, the annual rate of growth fell to 4.9%.

QV national spokesperson Andrea Rush said that Auckland values continue to hold steady with the average value across the region remaining at just over $1 million dollars.

“However, sales volumes in the Super City have plummeted to 30.0% lower than they were this time last year.”

This was because high prices coupled with banks’ stricter lending criteria are making it increasingly difficult for anyone but cash buyers or those with higher levels of equity to buy property, she said.

“It has also become much more difficult for developers to gain finance to build new homes, which is now leading to a slow-down in building activity in the market.”

QV Auckland homevalue manager James Steele agreed that a key characteristic of Auckland’s market is that it is more difficult than it has been to obtain finance.

“Lenders are asking a lot more questions than they used to, and are taking longer to process loans and get approvals back to customers.

“There are reports of deals falling over as buyers are finding it increasingly difficult to raise finance under banks’ increasingly strict lending criteria.”

This has contributed to a drop in the level of market activity, a decline in sales and, now, an easing back on sale prices at most levels, he said.

“There are plenty of options for people looking to buy, and the fear of missing out is long gone.”

Meanwhile, national property value growth is also easing back.

National values rose by 1.2% over the last three months, which left the national average at $639,051 in June, as compared to $634,018 in May.

While annual national value growth was up by 8.1% (or 5.9% once seasonally adjusted), this is the slowest annual rate since March 2015.

The results from different markets around the country were more of a mixed bag.

Rush said that average values in Hamilton and Tauranga are now rising again after decreasing earlier in the year.

“But a slow-down in value growth in the Wellington market is now more evident and Porirua, a previous hot spot, has seen values decrease over the past quarter.

“The Christchurch market is flat, with some areas seeing a slight decrease in values over the past quarter, while values continue to rise in a relatively buoyant Dunedin market.”

She added that values in regional centres like the Kaipara District north of Auckland, the Hawkes Bay, Nelson and the Tasman District are seeing stronger value growth than the main centres as buyers look to the regions for more affordable homes.

According to QV’s data, the top five regions for year-on-year value growth were Hastings (21.6%); Rotorua (20.2%), Whangarei (19.6%), Queenstown Lakes District (19.2%) and Napier (18.8%).

Wellington was close behind on 18.0% but its rate of growth has slowed considerably.

QV’s Wellington valuer David Cornford said that new listings and overall listings are up compared to the same time last year, while the number of days to sell has also risen.

“When you add to this the fact that sales volumes are lower compared to the same time last year and the rate of value growth has eased back, we can confirm we are now seeing an overall slowing in the market.”