QV property values are up in most parts of Auckland, but down in Wellington and some provincial centres

QV property values are up in most parts of Auckland, but down in Wellington and some provincial centres

Residential property values have continued to rise in most parts of the country over the last three months, according to Quotable Value, but the rate of increase is starting to slowdown in many centres.

The QV Residential Price Movement Index increased by 2.3% in the three months to the end of July, with the average New Zealand house valued at $479,193.

For the year to July, the Index increased by 7.6%.

Nationally QV says values are now 15.6% above the previous market peak of late 2007. But when adjusted for inflation, the nationwide annual increase is 5.9% and values remain below the 2007 peak by 0.9%.

“We are starting to see a slowdown in the rate of value increases in many of the main centres following on from the slowdown in sales volumes over the past few months," QV national spokeswoman Andrea Rush said.

“Sales volumes are between 15% and 25% lower than they were this time in 2012 and 2013 in most places around the country.”

Rush suggested the slowdown was most likely due to the Reserve Bank enforced restrictions on bank's high loan-to-value ratio (LVR) residential mortgage lending, and interest rate rises, plus the winter seasonal downturn.

"However, the Reserve Bank has now said it will take a break in rate rises for the moment, and banks are advertising that they will negotiate on lending to those with deposits of less than 20%," said Rush.

Values ease in central Auckland

Housing values in the Auckland region were up 2.1% for the three months to July and 11.7% for the year, although there was a slight easing in values in the central suburbs within the former Auckland City Council boundaries, which include Ponsonby, Grey Lynn, Mt Eden and Epsom, where values were down 1.2% in the three months to July.

"The Auckland region as a whole has seen values rise over the past three months but some areas of the super city are now showing a slight decline in values," QV spokesperson Andrea Rush said.

On Auckland QV said values are up 31.8% since 2007. But when adjusted for inflation, Auckland values are up 9.9% over the past year and are 12.9% above the 2007 peak.

QV valuer Bruce Wiggins suggested some vendors' price expectations could be getting ahead of what the market thought their properties were worth.

"Some properties are sitting around for several weeks with no offers, or below market expectation offers, which could be due to a disconnect between buyer and seller expectations, especially when the property requires some form of maintenance or upgrading."Wiggins said.

Around the country housing values increased in Christchurch, Tauranga and Dunedin but were down in Hamilton and Wellington.

QV Average Property Values at July 31 and % change over three months
Whangarei $335,044 -1.1%
Rodney $678,208 2.5%
North Shore $857,239 2.7%
Waitakere $564,875 2.6%
Auckland Central $844,957 1.0%
Manukau $598,838 2.2%
Papakura $431,444 0.2%
Franklin $465,090 1.2%
Hamilton $363,118 -0.2%
Tauranga $454,570 1.2%
Rotorua $270,592 -1.6%
Taupo $342,312 1.2%
Napier $323,775 -0.4%
Hastings $297,796 -1.0%
New Plymouth $349,480 -0.2%
Wanganui $177,919 -3.5%
Palmerston North $284,963 -0.9%
Kapiti $374,454 0.6%
Porirua $376,399 -0.1%
Upper Hutt $333,513 -0.3%
Lower Hutt $370,566 -2.3%
Wellington $535,559 -0.8%
Nelson $401,579 -0.4%
Christchurch $461,176 2.1%
Timaru $281,282 1.7%
Dunedin $290,658 0.3%
Queenstown Lakes $676,230 1.2%
Invercargill $207,492 0.5%
   Total NZ $479,193 2.3%

Here's QV's full press release.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

34 Comments

So home owners outside of Auckland are now watching their house values decline, while their mortgage repayments are increasing.
This will have the opposite of the 'wealth' effect.

Nah Mate , yur dreamin'  we just had another 4000 arrivals in July and in August we get another 4,000 , and  these buggers cannot all  sleep under the Auckland harbour bridge .
As long as this insanity continues , property prices will go up , and slowdown is a blip on the radar

Have to agree with you Boatman. Anyone with any sense would continue to invest in Auckland property. There is only one way it can go and that is up. I would not say the same for the rest of New Zealand especially in rural areas where there are just not the high paying jobs to attract people out of Auckland. It is a one horse race and there is no sign of this changing.

And a nation of overpriced houses is wealth? Nonsense.
 
Lower house prices = less money spent on interest = more disposable income.
 
The problem isn't interest rates it is house prices.

Spot on Zombie......imagine if all that mortgage interest repayment money, was instead of going to the big 4 Aussie banks, was being invested  in IT or another lucrative arena right here in NZ .... then we would finally see an increase in the OECD rankings ....but WON'T happen and sounding like a broken record, yet again .....too many "vested interests"

Mosy home "owners" are vested interests. They think they're getting wealthier. Until that myth can be dispelled it's more of the same - until it's not. then we're screwed...

What you're suggesting is very close to Labours policy of allowing the reserve bank to use kiwi saver contributions as an extra lever to control the economy, instead of just interest rates.  
It does seem stupid to pay our interest to foriegn owned banks.    Idea's like these should be given more thought and discussion.

Why are Labour wanting to make Kiwisaver compulsory…  contributions from everyone — employees, the self-employed and non-employees — are taxed, in that they are taken out of after-tax income. And employer contributions are also taxed.  Tax on a tax on a tax.  Each year we're paying tax on the interest earned. And then on interest on the interest re-invested. That means KiwiSaver earnings are almost cut in half by tax! A wage earner saving for 40 years would end up with over $100,000 more if KiwiSaver earnings were subject only to effective tax rates, the same as the standard marginal tax rates! 

Not to mention the concern about where the funds are invested. 
 
They need to get money from somewhere for their election promises and they have their eye on your retirement savings. 

The average is being held up by the number of high value properties being sold, but I suspect the REINZ index and possibly median will show a decline in Auckland values for July.

Not sure if the home owner in Palmerston N would agree with you in their $400000 house now worth 396000 facing $100 per month mortgage repayment increases. 

As long as Auckland continues to drive employment growth and (especially after the election when there is no chance Labour come in a whack capital gains on everyone).. house prices will steadily tick upwards until sufficient housing is opened up by Auckland Council.  

In 5 years time, Auckland house prices will be on par with Sydney.  

Who will buy them? Incomes are simply not keeping pace. There is an affordability ceiling which I think we're starting to nudge.

Who will buy them you ask? Every single property we have been following recently has been bought up by an investor or developer. They all end up on trademe for rent . Price vs income has nothing to do with it anymore, home buyers are not in the game. 

Nonsense.  The vast majority of house purchases are home buyers. 
 
Price V Income ratios as a means of measuring affordability have been antiquated for years. 

Out of interest, what exactly underwrites this continued increase in property prices?  Besides debt of course.
 
It appears rjf beat me to it.

Have you not heard of the never never

Migrants ......... they drive everyting , and you and I crazy

"wishful thinking" there diy-guy ...... lived in Sydney and will be way, way longer than 5 years when Auckland prices will be on a par with "Seedneee" ....Auckland to me has always been "Sydney for beginners" :)  

He might just be right, but for the wrong reasons.  I just finished reading this book, it's incredibly interesting and well written.
Australia: Boom to Bust: The Great Australian Credit and Property Bubble
http://www.amazon.co.uk/dp/B00JJ7UW0S/ref=pe_385721_48721101_TE_M1T1DP

Auckland is driving employment growth?  Is that why unemployment in Auckland is higher then the national average?  You seem to be implying there is some kind of housing shortage in Auckland, and the Council is about to open up sufficient housing?
No housing shortage in Auckland, so it's unlikely more housing will have any impact on prices.  I'm not sure what is driving the big gains in Aucklands housing, but it's not fundamentals thats for sure. 

rjf and Peakeverything you could say the same for Sydney, London, Hong Kong and alike. What will keep them going? There are a lot of people in this world with a lot of money. They believe that parking it in property in good locations is the safe thing to do. When I recently returned home from Europe on an Air France flight via Shanghai  in business class I noticed the only people in first class were of chinese origin and they were all relatively young. They have heaps of money and have a lot of trouble getting rid of it. When they see something they like they just buy it. And I have not even spoken about the wealthy russians propping up parts of the world such as London.

You are not wrong there.  Even in Singapore where most people are earning mega bucks and normal Honda Jazz will set you back $120,000ish.  You can spot newly arrived chinese immigrants driving Porsches, Maserati and living in condos within walking distance of Orchard Road.  I heard a commetary while back that there is something like 7 trillion US dollars sloshing about and people are itching to take it out of China.

If you go back to the mid-80s, you could hear the same narrative about the Japanese. 

Strange
 
Danged if I can recall Japanese buying up big in Auckland or Northland in the 1980's - and I was there - yet David Chaston (and now you) keep telling me it was so - were you there? - subject to confirmation, I don't think David was living in Auckland in the 1980's
 
Amendment - he was in NZ for 3 yrs, 1985-88, otherwise overseas until 1990's
 
I can and do recall stories of Japanese flocking into Surfers Paradise and the Gold coast - buying up big - apartments, Golf Courses and Resorts - playtime and money-at-play - and getting crucified when the Japanese economy tanked - the 1987 crash - and stayed tanked thereafter for the next 15 years - and they puked their offshore assets and pulled out and went home
 
But what is happening now in New Zealand (and other countries - Canada and San Francisco) is a different kettle-of-fish - it's long term stuff - it's not play-money - it's serious money - coupled with a world-wide exodus and they ain't never goin home

So Japanese investment and offshore investment was not based on "real money"? The carry trade doesn't seem to think so. Nor did the Japanese post-GFF when JPY became the strongest currency on the planet due to repatriation of the yen. Why is the Chinese story more "real" and sustainable?

I well remember Japanese buying the Wairakei International Golf Course in the 1980s when we were living in the Central Plateau.  The new owners  were going to make it fairly exclusive for Japanese tourists.  The locals and others kicked up a stink and the government (as sellers via the Tourist Hotel Corporation) demanded that they had to make it available to New Zealanders at a reasonable cost.
After being purchased by Japanese in 1989, the property returned to New Zealand ownership in 1997 when it was taken over by three Auckland businessmen
http://www.newzealand.com/travel/en/media/features/naturesustainable-tou...

Foreigners are only a very small part of the market; what peeps fail to realise is that Kiwis don't start from $0 anymore when buying a house.  Most FHB's have help from parents, most returning Kiwis from OE's have pockets full of GBP or USD, any person upgrading from say 3 - 5 bed house has equity/capital gains in their last house and interest rates are at record lows.  All this means that people can pay more for houses than they used to. 

Looks like all's good in landlord land. Certainly no complaints from me about these figures and the outlook for the property markets of New Zealand.

Auckland IS NOT EXPENSIVE BY WORLD STANDARDS

Auckland IS NOT anywhere near the world standards!

Per square meter, Auckland is dirt cheap by international standards, I sold a 45sqm ground floor London flat a few years back, for what I sold it for I brought a 4 bed house on 1,100sqm in Auckland (coastal suburb). 
 
What Aucklanders and NZers are just starting to realise is that Auckland is growing and maturing as a city and with that growth/maturity comes higher land prices, period.  Only way to stop Auckland price rises is to stop Aucklands growth. 

Am I the only person whose wondering why the figures quoted by QV are for the last 3 months???
We want to know the numbers for last month.

Triple the REINZ will have its July figures out next week. They always report in an unbiased fashion so you can rely on them just like our politicians who are only there to make life better for us.

The txt and table data for auck central do not reconcile?

Your access to our unique content is free - always has been. But ad revenues are under pressure so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.