Annual house price growth slows for fifth month - QV

Wednesday 3rd October 2018

Growth in house prices slowed for a fifth month, led by declines in Auckland and Christchurch, according to state-owned valuer Quotable Value.

Sale prices in September averaged $676,427 nationwide, 4.6 percent more than a year earlier, or 3.1 percent after adjusting for inflation.

But the headline increase has fallen from almost 8 percent in the year ended April, and was the lowest since October 2017 when QV reported a 3.9 percent annual increase.

And for the fourth month running, QV has reported a quarterly decline. September’s national average was down 0.6 percent from June, compared with quarterly declines of 1.6 percent and 0.7 percent reported in August and July respectively.

QV general manager David Nagel said the arrival of spring hadn’t had a dramatic impact on prices. While listings have increased significantly in most areas, value growth remained modest due to a lack of new market drivers.

"Supply has been constrained which, on top of stable interest rates, is keeping values at their current levels,” he said.

“The continued slowdown in the rate of value growth in our main centres continues to have a ‘trickledown’ effect on our regional centres, with many smaller provincial areas experiencing a gradual slowdown in growth. In saying this, regions that offer more affordable properties or exceptional lifestyle opportunities continue to see strong value growth.”

The Auckland region showed the biggest quarterly price decline at minus 0.7 percent. The $1.047 million average was 0.8 percent higher than a year earlier, buoyed by annual growth of 3.1 percent in Papakura and 1.8 percent on the North Shore. Manukau showed no annual growth.

Christchurch, where values fell 0.2 percent during the past three months, had the next lowest annual growth. The $493,922 average there last month was 0.5 percent higher than a year earlier.

While those centres have shown the biggest slowdown, 15 of the 22 major centres QV reports on are still showing annual price growth of more than 5 percent. Annual price growth in Dunedin, Gisborne, Whanganui, Palmerston North and Invercargill exceeded 10 percent last month.

Nagel noted that while activity doesn’t appear dramatic, there is still plenty going on. Population and affordability constraints have increased demand for apartments and semi-detached units in the main centres and that is likely to continue.

More listings are likely as summer approaches, but it’s unclear how that may affect values.

“With the current low interest rates set to remain until well into 2020, it’s hard to see any dramatic changes to values outside of the usual seasonal fluctuations.”

(BusinessDesk)

Comments from our readers

No comments yet