The latest monthly QV House Price Index shows that nationwide residential property values for May have increased 12.4% over the past year. Values rose by 3.9% over the past three months and are now 39.5% above the previous market peak of late 2007. When adjusted for inflation the nationwide annual increase drops slightly to 11.9% and values are now 18.9% above the 2007 peak. The average value nationwide is now $577,829.

It appears to be investor demand that’s driving the rapid value growth in Auckland and other parts of the country.” – Andrea Rush, QV National Spokesperson

The Auckland market has increased 15.4% year on year and 3.3% over the past three months. Values there are now 74.9% higher than the previous peak of 2007.  When adjusted for inflation values rose 14.9% over the past year and are 49.1% above the 2007 peak. The average value in the Auckland region is now $955,793.

Migration is continuing at the highest levels seen in 100 years and this population growth coupled with growing demand from investors… is driving values ever higher.” – Andrea Rush

QV National Spokesperson Andrea Rush said, “Residential property values are rising rapidly across Auckland again and they also continue to accelerate in many other parts of the country, with much of the activity driven by strong demand from investors.”

“Tauranga, Hamilton, Wellington, Dunedin and Queenstown values continue to see particularly strong growth, as do many other regional centres and smaller towns located within commuting distance of these main centres.”

“The Christchurch market by comparison is slow and steady with normal levels of activity and sales volumes but little value growth as supply is now meeting demand for housing in the city.”

“Migration is continuing at the highest levels seen in 100 years and this population growth coupled with growing demand from investors, means housing supply, particularly in Auckland and Queenstown, is not able to keep up with demand and this is driving values ever higher.”

The latest QV stats show the average value in the Auckland region is $955,793 and that the housing market rose 15.4% over the past year.  If values continue to rise at the same rate during 2016, then by this time next year the average value will top $1 million dollars.

“While it is clear Auckland needs more housing, both within the existing urban metropolitan boundary and on ‘future urban’ zoned land, as well as new infrastructure to service it. It appears to be investor demand that’s driving the rapid value growth in Auckland and other parts of the country,” says Andrea Rush.

QV house price index for selected regions (source: Quotable Value)

QV house price index for selected regions (source: Quotable Value)

Auckland
Home values across Auckland have begun accelerating again.  It appears that new measures aimed at curbing investor activity in the market, has not made much of a dent in demand from investors.

Waitakere City rose the most over the past three months up by 4.6%. Home values there are now 16.5% higher than this time last year and the average value there is $765,019. Home values rose 3.0% in the former Auckland City council central suburbs over the past three months and 13.0% year on year. The average value there is now $1,121,337.

Agents are reporting a shortage of listings, with well-presented good quality stock moving increasingly quickly, in some cases offers are made and accepted without the property reaching the wider market.” – James Wilson, QV Auckland Valuer

North Shore City increased 3.2% over the past three months and 14.1% year on year. The average value there is now $1,110,891. Manukau City was up 4.4% over the past three months and 19.6% year on year. The average value there is now $824,407. The rate of growth in the Papakura District value has slowed a little with values up 1.1% over the past three months and 20.7% year on year. Rodney values were up 2.9% over the past three months and 17.6% year on year. Franklin values rose 2.4% over the past three months and 17.1% year on year.

QV homevalue Registered Valuer, James Wilson said, “Throughout May we have seen a continuation of the buoyant market conditions experienced during April and values are rising rapidly across the city again.”

“Agents are reporting a shortage of listings, with well-presented good quality stock moving increasingly quickly, in some cases offers are made and accepted without the property reaching the wider market.”

“We are also seeing numerous examples of properties transacting within short timeframes by property speculators. Vacant sections within new developments are extremely popular, with the on-selling of vacant sites which have been purchased off plans providing strong capital gains.”

“There is on-going concern about the lack of awareness by homeowners following changes to home replacement insurance and we believe a growing number of homes are underinsured. We strongly recommend home owners seek expert advice such as from a registered valuer or quantity surveyor to ensure their “sum insured” is enough to rebuild their home in the event of major damage.”

The Hamilton market is still seeing strong demand from out-of-town investors and the supply of properties on the market is still not able to keep up with buyer demand.” – Stephen Hare, QV Hamilton Valuer

Hamilton
Home values across Hamilton City continued to show price increases – with values up 4.9% over the past three months and 26.2% year on year. The average value is $478,323.

There’s also a growing trend of first home buyers’ priced out of the market, purchasing more affordable homes in smaller townships within commuting distance of Hamilton.” – Stephen Hare

QV homevalue Hamilton Valuer, Stephen Hare said, “The Hamilton market is still seeing strong demand from out-of-town investors and the supply of properties on the market is still not able to keep up with buyer demand.”

“We are seeing particularly strong demand for properties in the lower value price bracket between $400,000 and $600,000. There’s also a growing trend of first home buyers’ priced out of the market, purchasing more affordable homes in smaller townships within commuting distance of Hamilton.”

“A typical example of this is what we are seeing in the Waikato district town of Ngaruawahia, which is a 15-minute drive North from Hamilton and about an hour and a half drive south of Auckland,” said Stephen Hare.

Growing numbers of Hamilton first home buyers are buying in Ngaruawahia, which is also popular with out-of-town investors and this is resulting in rapidly rising values in the town. The rise in demand for housing stock in the town has also led to a shortage of rental properties which is driving rents up.

Auckland investors remain very active in the market as they search for more feasible rental returns in Tauranga and surrounding small towns such as Te Puke.” – David Hume, QV Tauranga Valuer

Tauranga
Home values in Tauranga City are still showing a strong upward trend, rising 4.9% over the past three months and 23.1% year on year. The average value in the city is now $591,942. Western Bay of Plenty home values are also accelerating, up 8.4% over the past three months alone and 23.6% year on year. The average value in the district is now $525,133.

Tauranga first home buyers are finding it increasingly difficult to compete with out-of-town buyers and even entry-level houses in less sought after areas are now becoming increasingly unaffordable for them.” – David Hume

QV homevalue Tauranga Registered Valuer David Hume said, “The Tauranga and Western Bay of Plenty housing markets are continuing to show strong value growth.”

“Auckland investors remain very active in the market as they search for more feasible rental returns in Tauranga and surrounding small towns such as Te Puke.”

“Tauranga first home buyers are finding it increasingly difficult to compete with out-of-town buyers and even entry-level houses in less sought after areas are now becoming increasingly unaffordable for them,” said David Hume.

A number of recent auction results show that just how rapidly home values are rising and sales prices continue to exceed vendors’ expectations. A three bedroom Mount Maunganui property sold for $840,000 – setting a new benchmark for the area with similar properties that were previously selling in the early $700,000s. In terms of bare sections, 850 square metres sections in the Conway Drive Development in Paengaroa that were selling for $120,000 twelve months ago are now being on-sold at $210,000.

For the first time since prior to the previous peak of 2007, there has been no winter slow-down in the Wellington housing market.” – Kerry Buckeridge, QV Wellington Valuer

Wellington
The QV House Price Index for the entire Wellington region shows home values rose 4.0% over the past three months and 10.2% year on year and values are now 10.8% higher than in the previous peak of 2007. The average value across the wider region there is now $504,794.

Home values in Wellington City suburbs continue to show strong growth rising 4.4% over the past three months and 11.9% year on year. The average value there is now $610,102. Lower Hutt rose 3.9% over the past three months and 8.0% year on year and the average value there is $406,188; while Upper Hutt values rose 3.2% over the past three months and 6.7% year on year; Porirua also rose 2.8% since March and 8.6% year on year and the Kapiti Coast was also up 4.8% over the past three months and 8.7% year on year.

Residential property listings in Wellington City are half what they were a year ago which is leaving thin pickings for buyers.” – Kerry Buckeridge

QV homevalue Wellington Registered Valuer, Kerry Buckeridge said, “For the first time since prior to the previous peak of 2007, there has been no winter slow-down in the Wellington housing market.”

“Residential property values continue to rise across the region, as strong buyer demand continues to outstrip the low supply of listings for sale on the market. Residential property listings in Wellington City are half what they were a year ago which is leaving thin pickings for buyers and increasing competition for those homes on the market,” said Kerry Buckeridge.

Given the rapid rise in home values over the past few months it is becoming increasingly difficult for vendors to price homes for sale, and sale by deadline sale or tender are becoming increasingly popular.

“Most properties are selling well, with multiple offers and many sellers are getting a good degree more for their homes than they would have a year ago, and some people are surprised that their homes are selling well above expectation,” said Kerry Buckeridge.

Across the greater Christchurch area, in Waimakariri, Selwyn and Christchurch City districts, prices within subdivisions on the outskirts are reducing a little.” – Damian Kennedy, QV Christchurch Valuer

Christchurch
Home values in Christchurch City increased by 1.1% over the past three months and 3.3% year on year and 29.2% higher than the previous peak of 2007. The average value in the city is now $490,137.

QV homevalue Christchurch, Registered Valuer Damian Kennedy said, “The Christchurch market is ticking along with steady levels of market activity and modest growth.”

Valuers are noticing an increase in earthquake damage on properties they are inspecting, so we recommend people check their properties for earthquake damage from the Valentine’s Day and February 29 quake this year.” – Damian Kennedy

“Well presented homes in traditionally popular areas continue to be in high demand but properties with maintenance issues are tending to sit around for longer on the market. Buyers are tending to wait and see, to find their perfect property, rather than buying and ‘making do’ or improving the properties themselves.”

“Across the greater Christchurch area, in Waimakariri, Selwyn and Christchurch City districts, prices within subdivisions on the outskirts are reducing a little.”

“Valuers are noticing an increase in earthquake damage on properties they are inspecting, so we recommend people check their properties for earthquake damage from the Valentine’s Day and February 29 quake this year.”

Multi-offer scenarios remain commonplace in the market with demand for mid to higher value homes ($350,000 to $600,000) appearing to be at its strongest for several years.” – Duncan Jack, QV Dunedin Valuer

Dunedin
Home values in Dunedin have shown strong growth over the over the past three months, rising 4.1% since March and 10.3% year on year. The average value in the city is now $323,735.

There is still a shortage of listings and agents are still finding it difficult to satisfy buyer demand…” – Duncan Jack

QV homevalue Dunedin Registered Valuer, Duncan Jack said, “Dunedin home values have accelerated over the past three months and it continues to be a ‘sellers’ market’ with buyer demand still strong and sales activity levels very buoyant.”

“There is still a shortage of listings and agents are still finding it difficult to satisfy buyer demand with the low lending rates and the availability of funds likely to be assisting in fuelling this demand.”

“Multi-offer scenarios remain commonplace in the market with demand for mid to higher value homes ($350,000 to $600,000) appearing to be at its strongest for several years. There is also increasing demand for homes in the high value ranges ($750,000 plus) with this end of the market also looking to be as strong as it been for some time. However, buyers in this price bracket remain more selective and price sensitive than in the lower ranges,” said Duncan Jack.

There is a clear shortage of listings on the market and some agents have few properties left on their books.” – Bevan Pickett, QV Hawkes Bay Valuer

Hawkes Bay
Napier home values continued to show strong growth – increasing by 3.7% over the past three months and 11.2% year on year. The average value in the city is now $365,895. While Hastings values also continue on an upward trend rising 4.1% over the past three months and 10.6% year on year. The average value there is now $339,439.

QV homevalue Hawkes Bay, Registered Valuer Bevan Pickett said, “The residential property market in Hawke’s Bay has continued its strength with significant growth in both activity and values.”

“There is a clear shortage of listings on the market and some agents have few properties left on their books. The rental market is strong and there is a lack of good properties available to rent.”

“All sectors of the market are strong with the entry-level to mid-price brackets of homes under $400,000 particularly buoyant.  Locals continue to find strong competition for properties with those moving to the area and out-of-town investors. Tenders and auctions remain the preferred method of sale as vendors don’t want to put a cap on potential sale price, which is a sign of a rapidly rising market. Record prices are now commonplace and investors have a strong presence and seem prepared to take much lower returns than previously seen,” said Bevan Pickett.

Demand from out-of-town investors is continuing to drive up Nelson home values…” – Craig Russell, QV Nelson Valuer

Nelson
Nelson home values rose 3.4% over the past three months and 10.2% year on year. The average value in the city is now $454,565. The Tasman District also increased by 3.6% over the past three months and 7.0% year on year and the average value there is now $450,447.

We are also seeing increased levels of activity by speculators in the market in recent months and values are rising … as local first home buyers compete with investors…” – Craig Russell

QV homevalue Nelson Registered Valuer Craig Russell said, “Demand from out-of-town investors is continuing to drive up Nelson home values and we have seen some strong sales prices of late with some properties being sold in a short time period and often in a multi-offer situations.”

“We are also seeing increased levels of activity by speculators in the market in recent months and values are rising significantly at the lower end of the market as local first home buyers compete with investors looking for entry-level properties which offer the highest rental returns,” he said.

Well located properties in good schooling areas have been selling well and homes in the mid-range price bracket of between $500,000 and $700,000 are particularly sought after.

“There’s strong demand and a lack of listings available in ‘The Wood’ and city fringe areas. The lifestyle market in both Nelson and Tasman districts has also seen more activity particularly in the upper price bracket which has been relatively subdued in recent years,” said Craig Russell.

He says there is no sign of the Nelson property market easing in the short-term with current listing numbers continuing to fall and cheaper borrowing costs all giving a market perception that values will continue to increase.

Other provincial centres
Many upper North Island centres within commuting distance to Auckland, Tauranga and Hamilton and Whangarei continue to see a strong upward trend in home values. This includes places such as Rotorua where values rose 6.1% over the past three months; as well as the Kaipara District up 9.3%; the Whakatane District up 7.6% and the Kawerau District up 11.4% over the same period.

The only North Island areas that saw a decrease in values over the past three months were Masterton (down 0.1%) and Carterton (down 1.3%) in the Wairarapa.

In the South Island, Queenstown Lakes District is racing ahead as the perfect storm of high demand from tourists, locals, workers and investors for accommodation in the resort town mean housing costs are at a premium. Home values rose 9.0% over the past three months alone and a huge 22.0% year on year. The neighbouring Central Otago District is also experiencing strong high buyer in towns such as Wanaka, Cromwell and Clyde and values are up 6.2% in the district over the past three months and 14.7% year on year.

The only South Island area to see values decrease over the past three months was the Westland District down 5.3% and the Hurunui District near Christchurch which was down slightly by 0.2%.

Material source QV