NZ property value growth continues to slow in February, Auckland softens

Wednesday 2nd March 2016

New Zealand property value growth continued to slow in February, with a cooling Auckland housing market offsetting gains in other main centres.

The average value of a New Zealand home rose 11.6 percent to $556,306 in February from a year earlier, slowing from a 12.6 percent annual increase in January, according to state-owned valuer Quotable Value. Values were up 0.1 percent in the three months through February, slowing from a 0.7 percent pace in the three months ended Jan. 31.

Home values in main centres other than Auckland grew, and regions within commuting distance to Auckland are still benefiting from buyers looking for more affordable housing, QV national spokeswoman Andrea Rush said in a statement. Values in Kaipara, Waikato and Hauraki were up more than 5 percent over the past three months.

Despite more properties coming onto the market in February, listing levels remained low in most parts of the country, Rush said.

Auckland property values rose at an annual pace of 17.8 percent, down from a 19.8 percent increase in January, and have dropped 0.7 percent over the last three months, Rush said. The average price of a house in the Auckland region is now $925,656, down from January's $928,921.

“The drop in values in the Auckland region is a continuation of the softening in the market seen late last year when measures to curb investors were introduced," Rush said . "However over the past couple of weeks, activity levels have started to pick up across the super city, so it’s possible the drop in values may be short lived.”

Auckland's property market has been a bugbear for regulators as a shortage of supply and rapid inbound migration pushed up prices, stoking concerns about the affordability of housing. That prompted the government and the Reserve Bank to introduce new measures to quell the risk from a housing bubble. The central bank introduced Auckland-specific lending restrictions in November, while the government's more stringent enforcement of taxing speculators' capital gains began in October.

QV Auckland valuer James Wilson said that while activity levels remain low compared to the first nine months of 2015, investors who became cautious following the Reserve Bank's restrictions last year now appear willing to re-enter the market.

“Auction campaigns are still producing lower clearance rates than that of mid to late 2015, however post auction negotiations are proving successful in increasing numbers, attendance is also up and clearance rates are rising," Wilson said.

Values in Hamilton rose 22 percent in the year to February, a 2 percentage point increase on January, while Tauranga values were up 22.3 percent year on year, pushing average value in the city to $565,547.

Wellington region values rose 6.1 percent in the year, accelerating from a 5.9 percent annual pace in January. QV's Wellington valuer Kerry Buckeridge said there was a noticeable lack of listings and rising prices in Wellington's home sales market, and a shortage of rental properties in the area, with about 25 percent fewer listed in February than a year earlier.

"As a consequence, most landlords are putting rents up when renewing tenancies or re-letting properties," Buckeridge said.

Christchurch values were up an annual 2.5 percent, and Dunedin values increased 6.5 percent year on year.

BusinessDesk.co.nz

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