By Bernard Hickey
Quotable Value (QV) has released its October report showing house values rising across most of New Zealand as strength in prices in central Auckland and quake-hit Christchurch starts to spread across the country.
QV, which is the state-owned valuer, said nationwide property values were up 1.2% in the three months to October from the same period a year ago.
“While initially the upward movement in values was being driven by Auckland and post-quake Christchurch, many other areas of the country are now increasing also,” said QV.co.nz research director Jonno Ingerson.
“Auckland Area values have increased 2.7 percent over the past year and are now only 0.1 percent below the previous market peak. Within the Auckland council area values in old Auckland City have increased 3.8 percent over the past year, and are now 1.6 percent higher than the previous peak of 2007. Across the rest of the Auckland area values have increased by between 0.2 percent (Papakura) and 1.6 and 4.6 percent (Franklin) apart from Rodney where values have dropped slightly,” said Ingerson.
QV estimates how house values have changed in the three months to the end of October from the same period a year ago. It takes into account prices of recent sales to compare 'like with like' in any particular area or region. Real Estate Intitute of New Zealand (REINZ) figures simply measure the median house price of all houses sold in the month. REINZ figures are seen as more up-to-date, but slightly more volatile. QV's figures are seen as less affected by month-to-month volatility and less 'skewed' by shifts in the types of houses sold.
Barfoot and Thompson, Auckland's biggest real estate agency chain, released its sales figures for October last week showing average prices up 1.1% in October from September and were up 5.7% from a year ago. Prices in some central and eastern suburbs of Auckland were up around 15% from a year ago. See our article here.
Housing supply in Auckland has been limited in recent years by a lack of new house building and problems with leaky buildings, while demand from new migrants (both international and local) has boosted demand. Prices of a limited number of undamaged Christchurch houses have firmed since the earthquakes in September and February, and have accelerated in recent months as some insurance payouts are used to buy existing houses.
Ingerson said values in Hamilton had edged up slightly and were now only 0.7% below the same time last year. Tauranga had risen slightly in recent months and was now 0.5% below last year. Both Hamilton and Tauranga remain about 12% below their peaks, he said.
“After declining for the first half of 2011, values in the Wellington area have started to rise again and are only 0.9% below last year and 7.3% below the market peak” said Ingerson.
“Christchurch values continue to increase due to demand for undamaged houses, particularly in the Northern and Western suburbs. Values are now 3.4% above last year and only 2.0% below the market peak. The areas surrounding Canterbury have also been increasing in value since the start of 2011, with Waimakariri up 5.4% and Selwyn District up 4.9% since January,” said Ingerson.
"While values in Dunedin have been volatile over recent months they are currently about equal with where they started the year, but 2.4 percent below the same time last year and 6.8 percent below peak,” he said.
Provinces rallying now too
Ingerson said “while there has been a slight increase in new listings in many areas, this has yet to translate into an increase in the number of sales. However looking back over the past 20 years while sales generally pick up in October and November, that trend has been largely absent in the last few years, with any increases tending to be in February and March”.
"The index shows an increase in values in the last month for most of the Provincial centres in a further sign that values are rallying across the country. Despite these recent increases values remain below last year in most towns with Wanganui (-5.3%) and New Plymouth (-3.0%) the furthest below. Gisborne and Palmerston North are both 0.3% above last year while Nelson is 1.9% up following six months of gradual increases."
(Updated with detail, background, links to previous reports, intearctive chart below)