Nationwide values slowly climb, but buyers cautious
Residential property values have continued to gradually increase at a nationwide level according to the latest QV index for September.
Values are up 1.8% over the past three months and 5.3% over the past year. As a result values have now edged ahead of the previous market peak of late 2007.
Jonno Ingerson, QV.co.nz Research Director said "while nationwide values have been slowly increasing for over a year now, we need to put this into context. The rate of value increase is relatively slow, currently around 5% per year compared to the 10% to 15% we saw during the mid 2000’s".
"The current value increase is also being driven largely by Auckland and Canterbury. If those two areas are excluded then values across the rest of the country have only increased by around 1.5% over the past year. Furthermore, although values are now just above the 2007 peak, when adjusted for inflation they remain 12% lower."
"The number of sales in the last few months is higher than in 2010 and 2011, but the years since the global financial crisis have been characterised by very low activity. There is a lack of listings in many areas, particularly Auckland, which is also likely to be constraining sales numbers" said Jonno Ingerson.
"First home buyers and investors are definitely more active in the market now than has been the case for several years. However, in general buyers are acting carefully, doing their research and not overpaying. This is despite the lack of listings, which would ordinarily mean increased competition and prices" said Jonno Ingerson.
"Spring is usually a time when the number of listings increases as people prepare their property for sale during the warmer months. There is some evidence of this seasonal lift, but it is only slight" said Jonno Ingerson.
Values in Hamilton continue to rise, up 4.1% over the last year and 1.3% over the past three months.
QV Valuer Richard Allen said "interest from investors and first home buyers is still driving the lower end of the market, with sales volumes and enquiry from potential buyers in the upper end of the market is still steady. There has been increased demand for existing vacant sites in the east of the city causing a sharp increase in sale prices, as well as demand from developers for high density sites suitable for town house or multi-unit development."
Tauranga remains relatively flat, although up 1.1% on last year.
QV Valuer Paul Thomas said "Local real estate agents are reporting more movement in the market. However, apartments are generating particularly low sales volumes with a large amount on the market and very little demand."
Like most of the main cities there is now a more widespread trend of slightly increasing values in the provincial centres, at least over the past three months. A few months ago there was more variability with some areas up, some down and others flat. The exception is Whangarei where values have dropped 1.8% in the last three months.
Over the past year values have increased between 0.8% and 2.8% in Hastings, New Plymouth, Palmerston North, Nelson, Queenstown Lakes and Invercargill, with the greater changes tending to be in the north. Rotorua, Napier and Wanganui are at about the same level as last year, while Whangarei has dropped 1.7% and Gisborne has dropped 4.6%.
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