Housing affordability was once only an Auckland and Queenstown problem. The latest QV data shows it spreading rapidly nationwide as a renewed spurt of house price increases take it to most urban centres

Housing affordability was once only an Auckland and Queenstown problem. The latest QV data shows it spreading rapidly nationwide as a renewed spurt of house price increases take it to most urban centres

QV is reporting that their national house price index rose +4.0% in December from a year ago and that more than half of that came in the past three months.

For Auckland, there was zero annual rise, but this market did make back +1.9% in the past three months.

This data reveals that house prices are starting to rise quickly again, and the effect is nationwide.

The fastest year-on-year growth happened in Dunedin, with QV's price benchmark up +18.3%, with some parts of the southern city having risen more than +10% in the past three months alone.

Christchurch price rises are much more subdued, up +2.3% in a year, but almost all of that (+2.1%) came in the past three months.

The Wellington urban region saw average annual increases of +5.3% annually and more than half of that was also in the past 90 days. In the Wairarapa, annual increases are approaching +10%.

The twin cities Napier and Hastings (with a population now greater than Dunedin, so should also now be considered a 'main centre') recorded annual rises of +9.9% and +13.0% respectively, although their rise has been more even over the past twelve months, starting earlier than in most other centres.

Tauranga recorded an annual gain of +5.9%, also more evenly distributed in the year.

Hamilton's rise was +5.8%, half in the past three months.

While existing homeowners are getting a positive wealth effect, these sharp moves higher nationwide will bring Auckland's famous housing affordability problems to become a broader stress elsewhere. Prospective first home buyers may feel their opportunities slipping away. Low interest rates are no solution - they have been low all year, so rising prices now only mean purchase deposits have become a larger mountain to climb. And there seems to be little prospect that interest rates will fall further. 

In fact, low interest rates are the problem. They allow those who do have a market deposit to bid up prices.

The other problem is that there is a kind of sellers strike in place - there are record-low numbers of houses for sale, especially away from Auckland. That lack of supply means only the well-healed can win competitions for the few dwellings on the market.

QV's General Manager David Nagel describes the situation as a market "thriving" and being "a welcome boost". He sees "multiple buyers looking to purchase a limited number of properties" and "existing property owners looking to restructure their financial position to enable the purchase of an additional property". With industry reports and attitudes like that, set against the interests of aspiring first home buyers, we seem to be headed toward a new and more widespread housing stress period.

Perhaps we needed KiwiBuild and RMA reform to have cleared away the regulatory and land price hurdles by now so that the impending new housing affordability crisis was averted. Sadly, no housing reform actions have succeeded. And that will no doubt mean Election 2020 will be again set against continuing housing policy failures.

QV House Price Index
December 2019
Territorial authority Average* current value 12 month change%
Auckland Area 1,047,110 -0.1%
Wellington Area 746,955 8.6%
Main Urban Areas 814,597 3.0%
Total NZ 710,129 4.0%
     
Far North 479,070 11.6%
Whangarei 548,568 -2.6%
Kaipara 565,911 2.8%
Auckland - Rodney 943,938 -0.7%
Rodney - Hibiscus Coast 920,876 -0.9%
Rodney - North 967,221 -0.7%
Auckland - North Shore 1,201,420 -0.9%
North Shore - Coastal 1,377,120 -0.5%
North Shore - Onewa 969,594 0.0%
North Shore - North Harbour 1,151,166 -3.6%
Auckland - Waitakere 820,896 -0.2%
Auckland - City 1,244,959 0.9%
Auckland City - Central 1,088,499 0.5%
Auckland_City - East 1,565,061 1.1%
Auckland City - South 1,110,808 1.4%
Auckland City - Islands 1,151,244 -1.3%
Auckland - Manukau 901,918 -0.5%
Manukau - East 1,153,274 -0.3%
Manukau - Central 699,877 -1.1%
Manukau - North West 784,966 0.0%
Auckland - Papakura 716,121 2.1%
Auckland - Franklin 677,234 0.5%
Thames Coromandel 778,319 4.8%
Hauraki 440,151 5.5%
Waikato 512,897 5.3%
Matamata Piako 493,740 7.5%
Hamilton 604,034 5.8%
Hamilton - North East 748,229 4.9%
Hamilton - Central & North West 559,843 6.0%
Hamilton - South East 560,153 6.7%
Hamilton - South West 538,774 5.6%
Waipa 607,861 7.9%
Otorohanga 381,820 29.4%
South Waikato 268,750 7.0%
Waitomo 239,545 7.7%
Taupo 537,788 9.3%
Western BOP 682,276 4.3%
Tauranga 763,422 5.9%
Rotorua 499,702 13.1%
Whakatane 499,609 9.0%
Kawerau 288,259 17.6%
Gisborne 394,380 21.5%
Hastings 563,890 13.0%
Napier 578,861 9.9%
Central Hawkes Bay 390,594 8.8%
New Plymouth 495,649 8.3%
Stratford 317,605 15.3%
South Taranaki 265,187 13.2%
Ruapehu 251,778 21.7%
Whanganui 333,368 20.5%
Rangitikei 275,514 24.4%
Manawatu 442,466 19.6%
Palmerston North 483,695 13.7%
Tararua 257,993 16.7%
Horowhenua 407,373 20.6%
Kapiti Coast 630,426 9.3%
Porirua 652,213 10.3%
Upper Hutt 603,112 14.5%
Hutt 640,173 14.5%
Wellington 856,272 5.3%
Wellington - Central & South 856,653 6.3%
Wellington - East 907,845 4.4%
Wellington - North 779,974 4.7%
Wellington - West 978,488 5.9%
Masterton 400,922 7.3%
Carterton 452,319 8.3%
South Wairarapa 547,831 9.0%
Tasman 615,286 4.4%
Nelson 638,842 6.2%
Marlborough 496,590 5.4%
Buller 206,964 8.8%
Grey 229,439 8.9%
Westland 259,850 5.6%
Hurunui 400,352 3.9%
Waimakariri 456,265 1.8%
Christchurch 507,852 2.3%
Christchurch - East 385,330 2.6%
Christchurch - Hills 693,919 3.3%
Christchurch - Central & North 596,488 2.5%
Christchurch - Southwest 479,893 1.0%
Christchurch - Banks Peninsula 548,145 4.5%
Selwyn 558,645 0.6%
Ashburton 363,928 1.7%
Timaru 377,006 3.3%
MacKenzie N/A N/A
Waimate 277,363 14.6%
Waitaki 345,982 12.2%
Central Otago 559,738 10.5%
Queenstown Lakes 1,202,625 0.8%
Dunedin 514,680 18.3%
Dunedin - Central & North 533,398 18.1%
Dunedin - Peninsular & Coastal 480,325 19.3%
Dunedin - South 489,031 17.9%
Dunedin - Taieri 530,887 18.1%
Clutha 261,556 21.8%
Southland 344,778 19.0%
Gore 259,741 11.1%
Invercargill 334,353 16.8%

*The average value of all developed residential properties in the area.

QV house price index

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53 Comments

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11
up

Thanks David. Your exasperation at the situation is palpable. As a potential FHB, I am currently weathering a cacophony of voices encouraging me to buy in Auckland. This site reminds me I’m not the only one who can see just how bizarre things have gotten.

12
up

If there was a party called the House protest vote party I'd vote for it.
No policies, simply a repository for votes from those who think ALL of the parties in the last 20years have done absolutely stuff all to provide meaningful policy and regulation for a basic human need.
Severely disappointed by Labour, accept National have a legacy of doing bugger all, but labour have been known to come from left field and actually change stuff. Little parties are just as bad. You all suck.

Not all small party's suck. #VoteDifferent

Yes, ACT is a good option. And it’s not a wasted vote.

The party that got ~1/5th as many votes as TOP, but they aren't a wasted vote? Lol. Unless you live in Epsom, they are a wasted vote.

No, looks like party votes from across the country could well get ACT a second MP. Not a wasted vote at all - could double their representation in parliament. TOP votes serve no purpose - essentially discarded.

Edit: Also, I’m giving notice that I’m officially giving up on you and your house hunt. Should’ve listened to me earlier. Now the buyer’s market is over and you’ve missed the boat yet again.SMH.

Life's good, thanks :)

Stiff upper lip ay

For someone thats giving up (isn't this the third time?) you sure do prattle on...

Their immigration policy seems vague, I interpreted it as "more of the same". So no let-up of demand yay!

"Prospective first home buyers may feel their opportunities slipping away."
This is not QV creating a fear factor for any vested interest.
I have commented for some time that FHB should be acting. This is contrary to those advocating holding off for a bottoming of the Auckland market – or worse still a market crash - and those following that advice risk missing out; and that is not me suggesting it, rather it is QV.
Supporting the need to act is that most of the Auckland market drivers are still there. These include continuing low interest rates; continuing high immigration rate; shortage of listings; new builds up but barely cutting into existent housing shortfall; and anecdotal information investor activity returning with greater confidence of CG, no CGT, and improving rental yields.
Further considerations should be that increasing investor activity will most likely be in direct competition for those same properties affordable for FHB. The likelihood of mortgage rates falling further seemingly most unlikely.
The risk is that even a modest 2% increase in prices over the next year could see a need for $16,000 (after tax) more equity and/or mortgage to buy the same house.

14
up

I agree FHBs should act, if they can. I have.
However sadly many FHBs can't afford to act.
If you don't have a much higher than average income, or well off parents, you are basically screwed.

Hi Fritz
I agree that many potential young FHB unfortunately can't afford to act.
Sadly home ownership for 25 to 35 years olds from 1988 to 2018 has fallen from 65% to 35%.
Home ownership has previously been a socio-economic norm providing not only considerable intrinsic value, but also a high degree of security and wealth. While home ownership was once achievable by blue collar workers, there are increasing number of "middle class" white collar workers for whom home ownership is not going to be so. There will be a group that emerges who can be labelled the "renting middle class poor".
Those who can not afford to act, are likely to become part of that renting middle class poor. Equally those who hold off waiting for a bottoming of the Auckland market (already gone) and lower mortgage rates (unlikely) are not only putting their lives on hold, but also risk becoming part of that group.
Home ownership and housing affordability is a significant issue and one that is not being addressed.
You are fortunate, and I have no doubt that in twenty or thirty years time that you will reflect that buying your home - despite the current financial challenges - was one of the best decisions you ever made.

I know quite a number of Kiwi younger wage earners in the 30's that are opting to do the building smaller mobile homes to get around this issue, with 2 bed room homes for under £150k. Also some are living in boats to be independent. Seems they are voting with their feet.

Good initiative. Don't wait for the Polies!

Prospective first home buyers should act......what a joke

Question is,can they even if they want to unless pay a bomb for pigeon hole.

Just to give some perspective on the issue.

We sold our house at auction on 11 Dec 19- so effectively the last auction of the year.

House in Mt Albert, in Gladstone/MAGS zone - sold for 100K above CV. Around 3-4 bidders at auction, all probably FHB's - however all professionals (dual incomes) and European (surprisingly no Asian interest in house - though might be because it was cross-leased).

Appears one of the main drivers in price was lack of stock in market and people wanting to have something sorted out prior to school year.

Is that the 2 bed duplex (ex state)? If so, congrats on the price, you did exceptionally well for what it is.

No it was a3 Bedroom/1 Bathroom Bungalow.

Gladstone zone 3 bedroom for fhb ... that is ridiculous. Probs says a lot about fhb today.

The reflection of 'fhb today' is that we are in our mid 30's not our early 20's, and don't want to live in a moldy, cold old house, 2hrs from work, just to get on the ladder in an overpriced market. We have had professional careers for 10 years, to be able to be able to afford our first home.
You have no right to judge.

Come on now, my house 2 hours from work is dry and extremely well insulated thank you very much.

Well we know that the more widely NZ property price increase is fueled by more debt with the drop in mortgage rates allowing people to borrow more. The other thing that's helping to justify house prices increases, is the recent Council RV assessments in certain areas that have pushed up property values.
I see Northland has had their RV values hiked up by as much as 30% over 3 years. That would seem logical if you consider how many retired Aucklanders were cashing up when the market was a its height with Foreign Buyers in 2016/2017 as they moved out to the regions for a better lifestyle/pension pot.

Which has another unintended consequence. Those retirees that sell up and move to the regions are bringing money with them but aren't investing it locally. E.g. Whanganui median house prices have increased nearly 100k in the past 12 months yet there are very few businesses starting up or any existing businesses expanding to provide job opportunities. Its become a retirement village with limited overpriced housing options and limited career opportunities for young people, hence they leave.

Agree. With non productive assets like property going up by $100K in 12 months. Where is the incentive to risk capital and start/own a productive business that provides job opportunities to benefit people & the economy. Better off putting everything into purchasing houses. We glorify property market wins in this country and its sickening.

I could only laugh when I read the article in yesterday's Herald- 'Part-time property investors' big grip', particularly the bit that said this; "Any investors that are getting out have just been replaced by more investors says Nick Goodall from CoreLogic".
I couldn't count the number of posts I have read here from landlords outraged by any proposal to even slightly tilt the playing field in favour of tenants. Disgraceful-there will be a mass exodus and then who will provide shelter for these tenants-doesn't the government realise what an essential social service we landlords provide and so on. Self-serving, whining nonsense.
The unpleasant truth is that are too many greedy b...……..s out there, quite prepared to overcharge for grossly sub-standard accommodation and the last thing they want is a properly regulated tenancy sector.

Landlords are not greedy, they are people who are prepared to get off their butts and try and provide for their futures.
Have you got any problem with landlords that are negatively geared, that is subsidising tenants housing needs every week, making a capital gain when they sell.

11
up

"subsidising tenants housing needs"
Wow. Just how far up their own butt one has to be to think of being a landlord as being a charity?

TM2,

The idea that you or any other private landlord is 'subsidising tenants' housing needs every week' is bizarre and a good example of the rubbish spouted by so many landlords. Spare me "the people who are prepared to get off their butts" rhetoric.

I have no problem with there being a market for private landlords and tenants. I am a landlord-one property-myself. What I am against is that a great many of the properties are grossly sub-standard and that the balance of power is too heavily tilted in favour of landlords, not to mention the tax system. If, as seems inevitable, an ever greater percentage of Kiwis are unable to become home owners, then we MUST move to a better regulated market for those potentially life-long renters. The tax system is also part of the problem.

Don't you just love the condescending tone of some "hard working" landlords? It's like nobody else works hard, nobody else is smart, nobody else is out there trying to make a living. I'm in the top decile of earners, maybe even top 5%, but at this pace it will take me 20-25 years to become a home owner (not a mortgagee but an actual owner). And what about the other 90-95% of people who work hard?

I don't get left wingers. What do you exactly mean by "better regulated market"? Sounds like another leftie slogan with no substance/details. Basically what you are saying is "please take more of my private property rights away". Already took my right to gift/sell my properties to anyone I want from the losers' knee-jerk reaction, why not let some low-life take full control of it? How about this one: "less tax, less welfare = more ambition, more money in the pocket"? :) Paying someone perfectly well with a newborn, working part-time, studying and not listing the partner (who also works) a welfare of over $600 per week doesn't seem to make much sense to me ¯\_(ツ)_/¯

Ah yes, because everyone who's not a landlord must be on welfare.

Stev-O,

There is clearly a lot you don't get. People like you make my blood boil. "less tax" you say, but if you are ill you want an efficient well run public health service. If you are burgled, you want a swift response from a well funded police force. If your house is on fire, you want a rapid response from the publicly funded fire service on well maintained public roads. Of course, you want your children to be educated in well maintained and equipped schools staffed by well paid and committed teachers. of course you want all that and more-you just want someone else to pay for it.
You don't want a properly regulated tenancy market. Why? All you seem to want are rights, not responsibilities. You are just a parasite on society.

He sounds like a rabid right wing acquaintance I once knew who used to rant about beneficiaries.
Then he lost his job and got ill....

Insurance levies pay for our fire and emergency services (although this is being reviewed https://www.beehive.govt.nz/release/fire-and-emergency-new-zealand-fundi...).

Gee wiz mister. Here I am, working up to 80 hours a week, but how I can be more hardworking like you?!

Working hard is one thing Kiwis do really well. What many don't do well is look after their hard earned money and spend it wisely, myself included at times

If intending to keep a property long term, it has long been known that the time to buy is "NOW" as long as cash flow is enough to ride out a turn down. Can't help to feel for FHB's that could afford a lower priced house but waiting for the right time which never comes. Property expectations is a far cry from the 110-120m2 homes with single bathroom and single garage of the sixties to nineties. Today's expectation is 160-250m2 with ensuite and double garage with designer kitchen. No wonder housing is getting unaffordable without thinking about undersupply as well. Some FHB's can surely lower their expectations to get a foot in the market and upscale later rather than blaming others than them selves and take responsibility for their destination.

Repeating the same old BS doesn't make it any truer.

Neither does ignoring it make it less true!

Engage brain for a second and try to compute that the majority of would be FHBs can't afford homes at all, but somehow you are saying they can afford McMansions. yeah, its not true, and it doesn't make sense. Sure there will be the odd one that can, but most FHBs are buying those 100m2 houses on a subdivided section, not the 260m2 places that others are moving up to. This is the same bullshit we have come to expect from the boomers who rattle on about 18% interest rates (and say nothing about 14%pa wage inflation that came with it)

11
up

Yeah it's total crap. Up there with Tony A's avocado garbage.
We have just bought a 100 sq m, 3 bed townhouse.
Well designed, so won't feel too cramped, but hardly large with bells and whistles.
Even then, we are paying north of 700K.
Red neck boomer ranters are really tiring....

Maybe my comments are completely out of context. I didn't mean to demeaner FHB's. I know they can't afford the 260m2 places. I just wanted to give an opinion on another reason for higher house prices in general other than demand. Also I made the comment that a lot of people blame others and accept they can't do anything for themselves. I am aware of some under 30's that have been able to get into the market and congratulate them. And also Fritz it's quite clear that you are successfully determining your future. Well done, you will reap the benefits in future. Just for the record I live in the same type of house you described as it is all I could afford to buy. I am blessed and my heart truelly go out to those who can't. I just can't stand people who blame others if they can and won't put in the hard yards because life may be a little inconvenient although in the minority.

Fair enough, I may have jumped the gun when you trotted out much the same talking points as the boomers who like to pretend that they had it tough and the current generation(s) are just a bunch of entitled moaners.

Fully agree with your comment regarding cashflow and buy now. If you are intending on staying in it long term and have the financial capability to meet payments you should buy. Its better that you are paying your own mortgage rather than someone elses. Its an investment in your own housing security, which has many benefits

Housing affordability was once only an Auckland and Queenstown problem. The latest QV data shows it spreading rapidly nationwide as a renewed spurt of house price increases take it to most urban centres

Former Fed chair Yellen agrees with Prof Richard Werner's call for credit guidance (control of credit growth, restriction of non-GDP credit).

Has she read New Paradigm in Macroeconomics, Palgrave Macmillan, or Princes of the Yen http://www.quantumpublishers.com ? Link

What's wrong with this place we cant build a few houses. FAR TOO MANY regulations from insulation to handicaps toilets and parking to councils paranoid about literally everything including the size of a bathroom fan to zonings to carparking minimums and maximums to whether or not a ppty mgr reviews someones spending habits to health and safety legislation to earthquake strengthening. These follow years of tinkering because of lobby groups complaining to central and local govt, plus the NIMBYS and others who think they can tell you what you can and cant do on your own property. All have compounded to make the building process a maze you have to navigate carefully and with a lot of professionals that charge heaps. I once had the pleasure of looking through the Hamilton CC district plan of the 1970s. An A5 size booklet. The current district plan requires developed biceps to hold for any length of time and years of experience or a degree to be able to understand it. Most would-be developers give up, cant afford the extra costs or decide the end product will be too expensive. How come we lived happily in the past before most of these things were introduced?? Now everyone harks back to the "good old days" when houses did not cost so much... very ironical.

Most people in NZ that work CAN AFFORD to buy a property, just not in overpriced areas!
It is the choices that you make that determines how you get on in life in many cases.
If you can’t afford to buy in Auckland or Queenstown and you want to own then shift to where you can afford it.
You may require your partner to work as well but that is what you have to do to get ahead!!!!
You can still buy property for less than what you pay in rent so what is the problem?
Haven’t saved a deposit? Then save one! There are ways To do this and I am not talking hundreds of thousands!
With KiwiSaver etc. it has become extremely easy!

Yep I agree but you have to admit we are useless at building. Perfect example chch.

If only it were that simple.
Many of the smaller, cheaper places have limited job options.

Fritz, ChCh is still extremely affordable due to the amount of building that has taken place.
Are there jobs available.
Yes if you are prepared to work!
Far better standard of living than Auckland as well!
Be in before the housing does become more unaffordable

Christchurch is sadly turning to a nightmare of a place to live. Used to travel down there 15-20 years with work and I loved the place but its gone to the dogs since then.