A shortage of new homes in Auckland keeps pushing up house values says QV

A shortage of new homes in Auckland keeps pushing up house values says QV

The average national house value has increased 10.1% over the last year, according to Quotable Value.

QV says the average value of New Zealand's residential dwellings was $527,760 at the end of July which was up 4.1% compared to three months earlier.

In Auckland the average dwelling value increased by 5.7% to $855,672 in the three months to July, putting it 18.8% ahead of where it was 12 months ago.

QV said housing values in Auckland were continuing on a sharp upward trajectory in all areas and that average dwelling values on both the North Shore and Central Auckland (within the boundaries of the former Auckland City Council) were now above $1 million.

In Auckland Central the average value was $1,014,873 at the end of July which was up 20.1% compared to July last year, while on the North Shore the average value was $1,007,836, up 17.6% compared to a year earlier.

In Waitakere the average value of a home was $687,021, up 21.6% for the year, and in Manukau it was $715,919, up 19.6% for the year.

"There's still not enough existing stock or new homes being built to accommodate the demand for housing in Auckland," QV northern operations manager Jan O'Donoghue said.

"Investors and speculators continue to be very active across the super city, particularly in suburbs that offer the most affordable housing such as Mt Roskill, Massey, Te Atatu, New Lynn and Papakura.

"High numbers of apartments have also been selling off the plan in central Auckland as demand for more affordable homes reaches a crescendo."

However outside of Auckland, property values continue to rise at a much slower rate.

In Wellington City the average dwelling value was $546,481 which was only up 2% compared to a year earlier and in Christchurch the average value was $475,322, up 3.1% compared to year earlier.

However values in the Waikato and Bay of Plenty are also posting strong gains with average dwelling values in Hamilton up 7.4% for the year and Tauranga values up 7.7% for the year.

See the table below for QV's average values for homes throughout the country:

QV House Price Index - Three months to July 2015

Territorial Authority Average current value $ 12 month change% 3 month change % Since 2007 market peak change %
Far North 312,903 5.4% 3.7% -21.4%
Whangarei 351,837 5.0% 2.1% -11.2%
Kaipara 366,908 8.5% 7.3% -7.5%
Auckland - Rodney 740,977 9.3% 3.9% 26.3%
Rodney - Hibiscus Coast 734,361 9.5% 3.5% 25.0%
Rodney - North 748,808 8.9% 4.4% 24.7%
Auckland - North Shore 1,007,836 17.6% 6.2% 56.2%
North Shore - Coastal 1,148,505 15.9% 6.1% 52.4%
North Shore - Onewa 823,563 21.1% 6.7% 66.0%
North Shore - North Harbour 964,036 17.1% 6.1% 58.7%
Auckland - Waitakere 687,021 21.6% 7.3% 62.0%
Auckland - City 1,014,873 20.1% 4.6% 63.0%
Auckland City - Central 873,702 16.9% 3.9% 53.4%
Auckland_City - East 1,266,529 20.1% 5.1% 58.9%
Auckland City - South 930,377 22.9% 5.3% 72.8%
Auckland City - Islands 832,061 12.1% -1.9% 30.2%
Auckland - Manukau 715,919 19.6% 6.4% 56.4%
Manukau - East 931,586 16.2% 5.2% 56.3%
Manukau - Central 554,633 21.8% 8.7% 47.5%
Manukau - North West 600,481 22.7% 6.7% 62.5%
Auckland - Papakura 527,214 22.2% 7.7% 46.5%
Auckland - Franklin 532,965 14.6% 6.5% 34.7%
Thames Coromandel 526,115 3.4% 1.2% -9.5%
Hauraki 259,898 10.7% 4.6% -6.8%
Waikato 305,152 6.6% 3.5% 0.8%
Matamata Piako 285,146 2.3% -1.0% -2.3%
Hamilton 390,113 7.4% 3.8% 7.9%
Hamilton - North East 495,243 8.5% 4.1% 10.2%
Hamilton - Central & North West 363,319 7.4% 3.3% 1.5%
Hamilton - South East 357,521 7.0% 3.8% 2.3%
Hamilton - South West 343,228 6.8% 4.2% 0.3%
Waipa 361,285 5.9% 1.2% 9.8%
Otorohanga 193,998 -3.7% -5.8% -29.7%
South Waikato 128,826 1.7% 1.8% -21.0%
Waitomo N/A N/A N/A N/A
Taupo 347,652 1.6% 0.6% -13.2%
Western BOP 434,438 5.9% 3.3% -3.6%
Tauranga 489,734 7.7% 3.0% 1.7%
Rotorua 271,414 0.3% -1.6% -7.6%
Whakatane 302,958 2.8% 2.7% -12.9%
Kawerau 101,977 -3.5% -1.0% -36.0%
Opotiki 200,829 -4.3% -4.9% -29.4%
Gisborne 226,887 -1.2% -0.5% -23.7%
Wairoa N/A N/A N/A N/A
Hastings 309,499 3.9% 1.5% -0.7%
Napier 329,825 1.9% -0.1% -3.1%
Central Hawkes Bay 207,457 -1.5% -5.0% -21.7%
New Plymouth 359,947 3.0% 0.4% 8.9%
Stratford 198,914 -2.0% -1.6% -9.0%
South Taranaki 185,813 1.5% 0.2% -6.0%
Ruapehu 128,375 -5.7% -1.3% -28.8%
Wanganui 181,330 1.9% -0.1% -19.1%
Rangitikei 142,541 -3.4% 1.7% -21.2%
Manawatu 244,085 1.3% 0.4% -4.0%
Palmerston North 292,977 2.8% 1.1% -1.8%
Tararua 152,220 3.1% -1.3% -13.7%
Horowhenua 208,027 1.0% 1.2% -12.5%
Kapiti Coast 380,564 1.6% 0.0% -0.7%
Porirua 381,991 1.5% 0.0% 0.0%
Upper Hutt 337,397 1.2% -0.5% -4.0%
Hutt 375,237 1.3% -0.3% -4.4%
Wellington 546,481 2.0% 0.2% 2.6%
Wellington - Central & South 552,253 1.0% 0.5% -1.4%
Wellington - East 600,391 5.3% 1.4% 4.2%
Wellington - North 479,051 1.5% -0.3% 2.8%
Wellington - West 627,196 2.7% 0.0% 3.3%
Masterton 238,364 1.0% -1.7% -16.6%
Carterton 269,213 1.7% 0.5% -3.4%
South Wairarapa 305,380 1.1% 0.6% -9.7%
Tasman 422,913 2.2% 1.3% 5.3%
Nelson 414,989 3.3% 0.7% 8.4%
Marlborough 352,985 2.3% 0.6% -9.5%
Kaikoura N/A N/A N/A N/A
Buller N/A N/A N/A N/A
Grey 215,313 1.2% -2.8% -11.9%
Westland 229,386 0.7% 1.4% -4.5%
Hurunui 349,889 4.3% 2.9% 11.9%
Waimakariri 419,144 3.2% 1.4% 30.9%
Christchurch 475,322 3.1% 0.5% 25.3%
Christchurch - East 359,355 4.1% 1.6% 16.1%
Christchurch - Hills 643,820 2.0% 0.0% 16.4%
Christchurch - Central & North 555,575 3.1% 0.4% 25.5%
Christchurch - Southwest 453,253 2.5% 0.0% 33.5%
Christchurch - Banks Peninsula 496,472 5.5% 1.9% 3.3%
Selwyn 516,040 2.1% -0.9% 38.4%
Ashburton 326,941 1.7% -0.5% 16.8%
Timaru 305,434 8.6% 2.5% 21.7%
MacKenzie 305,363 8.8% -2.8% 6.6%
Waimate 199,220 2.1% -4.8% 5.6%
Waitaki 227,818 2.1% 1.0% -0.2%
Central Otago 330,258 2.7% 2.3% 4.2%
Queenstown Lakes 717,021 6.0% 0.2% 4.3%
Dunedin 298,928 2.8% 2.5% 4.4%
Dunedin - Central & North 310,929 3.8% 2.8% 3.1%
Dunedin - Peninsular & Coastal 277,370 3.5% 3.8% 2.5%
Dunedin - South 284,751 1.5% 3.2% -0.3%
Dunedin - Taieri 306,900 2.4% 0.8% 4.4%
Clutha 168,595 0.2% 0.6% -6.9%
Southland 216,705 6.8% 4.9% -5.9%
Gore 184,621 2.4% 3.0% 5.0%
Invercargill 207,367 -0.1% -0.1% -6.0%
         
Auckland Area 855,672 18.8% 5.7% 56.6%
Wellington Area 458,250 1.6% 0.0% 0.6%
Main Urban Areas        628,722 12.6% 4.7% 36.9%
Total NZ        527,760 10.1% 4.1% 27.4%

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49 Comments

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10
up

Interesting analogy , a crescendo in classical music is usually at the end of the piece , often ending abruptly.

Dependent both on who wrote the music and whether the players are following the composers instructions...

But in saying that a little Elgar springs to mind...Auckland could be the land of hope and glory...which of course has the final line before the end crescendoing "make thee migh-t-ier ... yet!"

If it's an orchestra is Wheeler the conductor? If so, I don't think the musicians are paying attention.

Note that Selwyn and to a lesser extent Waimakariri are skewed by the very large amount of brand new house building over the past few years compared to the size of the districts. Price rises of existing homes since the 2007 peak are probably about the same as in ChCh at 25% on average.

Auckland is another story. Do we really consider 50-70% increases for what are in general the same houses as 2007 to be acceptable when NZ ex greater Auckland and Christchurch probably rose no more than 5% (and possibly was close to unchanged) over the same period??

The boom in selwyn (it really has been), has to a large extent soaked up a lot of demand in ChCh for domestic and industrial.

iZone is the largest industrial park in NZ (Rolleston).

Interesting... they just need offices in Rolleston as the amount of traffic heading in ChCh to work is insane... and with ChCh CCC not even using ONE piece of spare land in ChCh to put in a railways station in the centre of town I don't hold up much hope for anyone really wanting to go to ChCh in the future considering Rolly has a great (if mostly unused railway station) and Christchurch has no parking.

You have to wonder about the decisions coming out of the Christchurch extended quango...

Full description of why Rolleston is doing so well and Christchurch CBD is not is explained in the following article.

https://medium.com/making-christchurch/1-billion-fletcher-crown-housing-...

...is this just going to go on and on and on? In 5 years are we going to be reminiscing about the days you could buy a home in NZ for under a Mill? ......the temptation out there to gear up and join the ride must be huge. Any one else getting a migraine wondering where/how to 'invest'?

No you'll be reminiscing about how you could buy a house for under $2m.

Auckland 56.6% increase since the 2007 peak. Imagine if you sold your home in Auckland during 2008, 2009 and moved to Wellington. Hahahaha.

I guess what this article suggest is "What if you bought last week?" or still have what you bought in 2008 and 2009? The hardest thing for most people is to sell at a loss. Now that can be a loss on purchase price, or simply a loss on 'where it was last week', hoping for one more charge at that price.. Until the cash is in the bank, no one has made anything.

Yes, but someone buying in Wellington today will be laughing if Auckland erupts before Wellington has a decent shake... Nothing is certain.

not a problem if he is now mortgage free

As usual, it is pleasing to note that all is well in" Auckland landlord land" - gear up and ride the wave :D

This gives credence to why some families in Wellington have refused to be transferred to Auckland with their jobs and have opted to take redundancy payments when offered. They do not want huge mortgages just to buy some ordinary house in Auckland paying over a million dollars when they have a very good home in Wellington. Those smart ones have put some of the redundancy payment onto their existing Wellington mortgages and hopefully found work in Wellington within a very short time. In fact I know two who have.

No action and denial by Key has provided a Merrill Lynch style market with professional investors and speculators piling in and locals trying to compete.
The value of housing is so out of whack with NZ average income fundamentals that its ridiculous.

and that is where the problem is as soon as sentiment changes the investors and speculators will walk away and leave those with massive mortgages trying to service them on NZ wages.
there will be some blood on the floor as when (not if) rates rise again people can not make payments and will have to walk away

QV works off settlement data so this info is already outdated.

Agents I've spoken to over the last 2 weeks have said the market is cooling. I think it will be the next few months which may offer some interesting reading - especially once listings jump in Spring. Then we can gauge whether the new rules are biting.

agree in the outer parts of auckland houses are taking longer and prices have stopped rising

I think we have just watched the encore and the crowds are heading for the exists...no pushing or shoving please..

I don't think I've ever seen such a conflict between economic indicators going south and house prices heading north. I wonder what the sentiment would be like if there are three months of prices falling while things carry on getting even tougher in the real world? Is every homeowner and landlord out there feeling robust and confident enough to not think about selling in that event? What would your reaction be as an investor (as opposed to owner of home) to a few months of declines. What would your strategy be?

My landlord is a very clued-up guy and is quite senior in one of big Aussie/Kiwi banks. He's selling up his Auckland property (but keeping beach house up north). He should be sold out before the October investor restrictions kick in (or limp in, depending on your view).

Just a thought, scratch out the gains in some of Auckland's suburbs and where else is there much of a gain? dont think so.

if you take out auckland the rest of the country is only up by a little so it becomes a tale of two areas
then you have to ask why
Are auckland wages twice the rest of the country ? no
are all the jobs in auckland ? no
is auckland the only nice place in NZ to live? Hell no
then why?

Why? Greed and madness. I'm old enough that I've seen it all before both in houses and the sharemarket and been burnt by both. And I wasn't mad or greedy, burnt because had to sell in 1990 both property (family home) and other investments because of divorce settlement. Remember the three Ds. Debt divorce and death! Will get you every time!

I think it will take more than a few months of declines to shift sentiment.

Property investment / speculation is deeply ingrained in the Auckland psyche. Most Aucklanders have never experienced a true property bear market.

I think even a year of price declines or about a ~10% decrease probably wouldn't be a tipping point. If this happens interest rates will be low, the media will be in a frenzy about what a great opportunity it is to buy. Take the scenario a bit further and assume a recession, vacant rental properties, mortgagee sales, price declines of 15-20% or more and then things might get interesting.

Your landlord sounds like a smart guy!

13
up

The first roles and duties of government are the protection and furtherance of the well being of (1) citizens and (2) residents.

The furtherance of the well being of non-citizens and non-residents is no part of the role or duty of any responsible government - bar foreign aid and relief, etc.

John Key and his government appear to suppose that they fulfill their primary roles and duties by enriching citizens and residents via allowing the fuelling for an explosion of house values/prices.

There will always be new residents and new citizens, but the availability of cheaper and more substantial amounts of money to these new groups, and via non-citizens and non-residents, has grossly distorted the previous economic and social compact between old and new, and between those living here and not living here.

Certainly, those who own Auckland houses now have been immensely enriched. But has there ever been a greater theft of opportunity from other current citizens and residents, and from future generations?

The extreme market distortion, via a flood of imported money, means that those whose jobs hold society together - the nurses, the school teachers, the professionals and tradespeople - will no longer be able to live – except as rent slaves - in much of Auckland.

For these people now, and for our children, a big part of the New Zealand way of life in our largest city - the independence and security of living in your own home – has been willingly trashed by an abject failure of responsible government.

Aside from those selling up and leaving Auckland, have Aucklanders been immensely enriched? Bigger mortgages, less disposable income, no retirement savings, higher council rates. It's paper wealth but with real outgoings.

John Key's comment about not getting wealthy by selling things to ourselves was ironic given that has been Auckland's economy for the past decade (as well as selling our assets offshore).

Ahh....that's just what I was thinking, but what you refer to is a subset. I'm thinking that the masters are expecting those benefiting from the "great wealth effect period" are going to share the spoils through consumption, thereby filtering the wealth to others. The end result is a circular flow of money that everyone gets to put their paws on.

And this is happening -- new car sale, domestic holiday, increase in regional housing prices, meal eaten in restaurants, electronics sale, etc

OK. Good. So our consumption is being driven by asset price increases. Nothing wrong with that as long as the momentum can be maintained. I'm sure that some observers will ask "Haven't we been down this road already?"

I've said that it is akin to a high from drugs with lots damaging side effects.

thats problem with being driven by asset increases it's not maintainable (sustainable)

The "masters" are currently engaged in a process of asset stripping and pillaging of the public wealth rather brazenly, right beneath our noses. This is exactly what I warned about when they first announced the State housing "reforms"

"Finance Minister Bill English says the proceeds from selling state houses are unlikely to be spent on new state houses and may go into the Consolidated Account."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1134...

"The Government is about to give Ministers extraordinary powers to take direct personal control of selling state houses, exempting Ministers from normal legal requirements and leaving the sale process wide open for corruption, Labour's Housing spokesperson Phil Twyford says.

The Social Housing Reform (Transaction Mandate) Bill tabled today is the latest attempt by a Government desperate to off-load state houses and keep its troubled policy afloat."
http://www.scoop.co.nz/stories/PA1507/S00024/state-house-sell-off-bill-g...

The Hoi Polloi have been deliberately blinded by a complicit, meek, media, and by the dangling of baubels like the Auckland house market in front of their eyes.

Interesting perspective. I think that the masters probably believe that a solution will appear. Based on my experience, affordable housing that is acceptable to "average" people is only really achieved through public input. The two examples that spring to mind are Germany and Japan. However, in the case of both those countries, the national priority is to enhance their industrial might as opposed to wealth generation through asset appreciation. OK, Japan went through a period of madness, but that was derived from their industrial might in the first place.

theres affordable that is acceptable to average people (based on local economy) which is a bit of a socialist pipe dream.

and then there's WTF unaffordable that is pumped by foreign traders buying with beads/blankets/stolen-cash/fiat promises which has zero link to the local economy, that locals have no hope in achieving, let alone any question of "affordable".

Auckland is in the later group. The former is manageable with a little work, the later is invasion by another name.

No its invasion by the same name just a different method

mean while in christchurch now the rebuild is dropping off and foreign workers are not needed as much

http://www.stuff.co.nz/the-press/news/70812890/christchurch-housing-mark...

Um... yup... life's still good in landlord land.

PS: Keeping an eye on those provincial cities. They look TOO cheap compared with the big smoke.

Through another lens, I bet they look TOO expensive compared with the provincial incomes.

especially risky in wine growing areas

http://wineindustryinsight.com/?p=63417

Hmm wine growing, do you realise that about 40% maybe more now, of our wine growing/producing is in the hands of foreigners

I'd double that figure.

Every time you comment on this forum you demonstrate why a very, very large stick needs taking to the business of landlording.
You move into the provinces and price people out there, we can clearly see then exactly how the whole thing gets started. You go in, push especially the fhb out and hey presto, you have created yourself your own market.
I would compare landlording to parasitic wasps on caterpillars

I comment 'cause I'm trying to get you going don'tgetmegoing.

Besides... people here just love the PI success story. Property articles are always the most commented on at interest.co.nz

And I answer to make sure you don't get away with it. PI's are not "loved". And property articles are most commented on as having a HOME is the need and desire of EVERYONE and if enough of us make a noise about the disgusting situation of fewer and fewer people being able to own their own, especially with atrocious tenancy laws of this country, then I for one will take every opportunity to point this out. As more and more people wake up to it, more is the chance that something will get done about it.

Lots of people like PIs don'tgetmegoing. They recognise that PIs offer good quality housing at the lowest price possible. The rental market is very competitive and low costs for tenants is the result. My rental properties are always in demand by tenants. I must be doing a good job 'cause people want to live in my properties.

You should celebrate the role us PIs play in providing affordable housing to New Zealanders.

Good on Kiwi PIs I say. Keep up the good work.

Why the hell did the govt give about 3 months notice on the new capital gains tax law. Why didn't they impose it the day after they announced it, all they have done is pour petrol on the fire.
We are being ruled by fools

with the recession on the horizon and our open door policy, unemployment will rise sharply in Auckland then all of a sudden