House Prices

Big city values plateau

Powerhouse regional markets are driving value growth in the property market while values in big city markets are flatlining.

Wednesday, August 02nd 2017

The latest instalment of QV’s monthly House Price Index shows that, in July, Auckland saw the slowest rate of annual value growth in over five years.

Once adjusted for inflation, average values in the region increased by 3.4% year-on-year while quarterly value growth plateaued at 0.0% for the second month in a row.

This left Auckland’s average value at $1,044,303 in July, as compared to $1,045,059 in June.

QV’s data shows that, much like Auckland, value growth in the country’s other big cities has now also slowed significantly.

Hamilton saw value growth of 0.4% over the past three months and 5.4% year on year, which left the average value at $540,840.

QV’s Hamilton valuer, Stephen Hare, said the heat has come out of the market, listings have increased and there was not the same buyer demand.

Christchurch values decreased by 0.2% over the past three months and rose by just 0.6% year-on-year, which left the average value at $495,098.

QV’s Christchurch valuer, Daryl Taggart, said the Christchurch market is stalling, with limited activity and properties increasingly harder to sell.

Big city markets drive the national property market, so their change in pace has left nationwide annual value growth at its slowest since February 2015.

Nationwide values grew by 4.6% year-on-year, once adjusted for inflation, and by just 1.6% over the past quarter.

.This left the national average value at $641,280 in July, as compared to $639,051 in June.

QV national spokesperson Andrea Rush said that while nationwide values are still rising, the growth is now being driven by regional and provincial centres rather than the largest cities.

The data shows that the flatlining value growth seen in the Auckland, Hamilton and Christchurch markets has now spread to other city markets.

Rush said that Wellington and Dunedin are also now experiencing a similar trend with quarterly value growth in both cities slowing to below 1.0%.

“Much of the slowdown in the markets is being caused by high prices and banks stricter lending criteria meaning it’s difficult for many buyers to raise finance to purchase and this is now constraining the market.”

However, she said that record high net migration continues and yet building consents are now trending downwards.

“So the underlying demand and lack of supply for homes remains in the market, particularly in Auckland.”

Meanwhile, the value growth in many regional markets stood in stark contrast to that of the big cities.

The Queenstown Lakes District and Hastings led the way with both regions seeing 20.0% year-on-year value growth.

Napier, Rotorua, and Whangarei were close behind, with year-on-year value growth of 18.4%, 17.8% and 17.2% respectively.

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.