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Regional house prices soar as Auckland levels off


04-05-2017

JASON DORDAY  www.Stuff.co.nz

Quotable Value national spokesperson Andrea Rush gives Stuff.co.nz the latest data on NZ house price growth.

New data from QV shows it is now regional New Zealand where homeowners are making the quickest capital gains on their properties.

The latest QV House Price index reveals nationwide residential property values increased 12.9 per cent in the year to March, up 0.6 per cent over the past three months.

But while Auckland region's values increased 12.3 per cent year-on-year, the standouts are areas such as Rotorua, up more than 28 per cent, Queenstown Lakes District, also up more than 28 per cent, and Hastings, up more than 20 per cent.

Wellington had the fastest rise of the main centres, up more than 21 per cent.

"The Wellington region continues to see some of the strongest value growth of any area in New Zealand, particularly in more affordable areas outside the central city such as Porirua and the Hutt Valley," spokeswoman Andrea Rush said.

Prices are still rising in central Auckland, while dropping slightly in other parts.
SIMON MAUDE/FAIRFAX NZ

Prices are still rising in central Auckland, while dropping slightly in other parts.

"Values also continue to rise steadily in Dunedin, which remains New Zealand's most affordable city."

The QV House Price Index for the wider Wellington region lifted again March, with home values up 21.2 per cent year-on-year and 3.7 per cent over the past three months.

Porirua values were up the most over the quarter  - 7.1 per cent since January and 25.4 per cent year-on-year.

Rotorua has one of the fastest rates of value increase, year-on-year.
BENN BATHGATE/FAIRFAX NZ

Rotorua has one of the fastest rates of value increase, year-on-year.

QV homevalue registered valuer David Cornford said: "Upper Hutt has seen the largest year-on-year value growth followed closely by Lower Hutt and Porirua. First-home buyers continue to look to these regions as they struggle to secure a home in Wellington City where average values are now over $700,000."

But things are much quieter in the usual hotspots of Auckland, Hamilton and Tauranga.

Over the past three months, Auckland prices dropped by 0.2 per cent and West Auckland and the North Shore's by 1.4 per cent. Some parts of the city are still recording price rises - the central suburbs are up almost 1 per cent over three months.

"The downward trend and dampening in these markets seen since the latest round of loan-to-value (LVR) restriction may be shallower than expected," Rush said.

"It's possible we may see values start to rise in these main centres in coming months given that the market is still being driven by a high number of sales to investors, record high net migration, relatively low interest rates, a lack of supply and fewer taxes on property investment than many other countries."

QV Auckland homevalue manager James Steele said there was still strong growth in the top end of the market, where buyers were not affected by LVR rules.

The drop in Hamilton home values since the introduction of the latest round of lending restrictions continued in some parts of the city but other areas saw values stabilising and rising again. 

Overall values for Hamilton City have risen 15.7 per cent year-on-year and dropped 0.4 per cent over the past three months. 

Home values in Christchurch City are rising again in all areas across the city apart from Banks Peninsula. Values increased 2.4 per cent year-on-year, and 0.6 per cent over the past three months.

In the North Island, all areas saw values rise over the past year. Areas just south of Auckland continued to see strong growth, with South Waikato District values up 35.7 per cent year-on-year, and Rotorua up 28.2 per cent since March 2016 and 4.5 per cent over the past three months. Values were rising in Whakatane, Opotiki, Gisborne, Rangitikei, Whanganui, Palmerston North and the Horowhenua after many years of relatively low value growth. 

Andrew King, president of the NZ Property Investors Federation, said Rotorua seemed to be short of rentals, which was driving demand. Investors who had been priced out of Auckland were looking to regional centres for opportunities, he said. 

"The lower prices mean you don't need as much of a deposit and rents there are going up quite a bit too."  

But Jeremy O'Hanlon, spokesman for Homes.co.nz, said there were indications Auckland had drawn its neighbours into a bubble.

"For most regions within a couple of hours of Auckland house price growth in the last 12 months has outpaced population growth significantly, putting questions around what sort of bubble the housing market in these areas could be in. 

"If there is no fundamental change in the demand of something, and prices start sky-rocketing, it's reasonable to assume that speculative investment is the culprit."

In the South Island, most areas saw values rise over the past year with the exception of the Grey District on the West Coast.  

Hilary Parker, of research firm Infometrics, said regional areas were playing catch-up.

"While the property market is cooling in Auckland, we are still seeing strong growth in areas that took longer to accelerate, such as Rotorua and Whangarei, driven by similar positive economic conditions as other areas. House price growth in Wellington is also very strong, but has risen less over last six years than prices in many other areas in New Zealand."

 - Stuff

 

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