Wednesday 2nd May 2018
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New Zealand house value growth slowed in April in urban centres as investor activity dropped and the market heads into winter, according to state-owned valuer Quotable Value.
Residential property values nationwide increased 7.6 percent year-on-year in April, and were up 1.1 percent for the previous three months, to an average $679,000, QV said. In the Auckland region, which has led gains in house prices over the past five years, prices rose 0.8 percent on an annual basis and dropped 0.3 percent on a quarterly basis to $1.05 million.
"Nationwide values continue to rise at a moderate pace with many regional centres continuing to see steady increases, while the rate of growth continues to slow, plateau or even drop slightly in the main centres," said general manager David Nagel. "The slowdown in value growth can be partly attributed to the usual seasonal slowdown in activity as we approach the winter months and also the fact that many people, particularly investors, are not expecting significant capital growth in the coming months so are less active in the market.”
Recent Reserve Bank figures showed March reported the biggest value of high-LVR mortgage lending since August 2016 at $443 million and the highest monthly lending to first-home buyers at $911 million since the central bank started collecting the data. The RBNZ eased up on the loan-to-value speed limits this year.
Within Auckland, North Shore values lifted most, up 3.2 percent to an average $1.2 million in the year, while Manukau values dipped 0.3 percent to $900,000. QV Auckland senior consultant James Steele said first home buyers were making the most of a drop in investor activity, and were trying to buy houses below $600,000 to qualify for the government's KiwiSaver HomeStart grant, but were finding it difficult to buy houses to meet their size and location criteria.
"Listings are staying on the market for a longer period of time and fewer properties are going at auction, providing more opportunity to negotiate and place conditional offers which is benefitting buyers," Steele said.
Wellington region values rose 6.6 percent on an annual basis to $642,000 but were down 0.3 percent on a quarterly basis. QV Wellington senior consultant David Cornford said supply is tight in the capital, meaning competition is continuing to drive house prices up, particularly at the lower-to-middle end of the market.
Most of the townhouses in a yet-to-be-built development in Petone, priced around $550,000, were sold recently before any formal marketing began, highlighting the strong demand for affordable housing in Wellington, he said.
"First home buyers are motivated to purchase with both rising rental costs and access to their KiwiSaver funds for deposits. We continue to see strong demand in this segment of the market," Cornford said. "Although the “student surge” into Wellington has now settled the rental market remains very tight and there has been a significant uplift in rent levels over the last 12 months, particularly in Lower Hutt."
In Christchurch, values dropped 0.5 percent in the year and 0.2 percent in the quarter, to an average $493,300, while Dunedin saw house values jump 8.8 percent annually and 3.1 percent in the quarter to an average $404,500.
QV Dunedin property consultant Aidan Young said there was plenty of activity from first home buyers looking for properties under the $400,000 HomeStart grant cap, and the city is still a cheaper entry point compared with the rest of the country.
Hamilton values rose 2.9 percent in the year and 1.7 percent in the quarter, to an average $554,500, while in Tauranga values rose 3.8 percent annually and 0.8 percent in the quarter to an average $704,200.
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