Property values flattening in many parts of Auckland, still rising elsewhere

Property

RBNZ and government clamp down on residential property investors & offshore buyers starting to bite in Auckland as housing values flatten with other regions still rising

13th Jan 16, 12:01pm by Greg Ninness

Housing values were largely flat in Central Auckland, Waitakere and Manukau in December but continued rising in other parts of Auckland and elsewhere in the country, according to the latest figures from Quotable Value (QV).

According to QV, the average value of homes in Central Auckland (the area within the boundaries of the former Auckland City Council prior to the Super City amalgamation) was $1,095,838 in December, barely changed from November's average of $1,095,480. Nonetheless this was up 20.7% on December 2014 (see the chart below for average values in all districts of NZ).

Similarly, the average residential property value in Manukau was $796,027 in December, down slightly from November's average of $796,950, but up 26.3% compared to December 2014. The average value of homes in Waitakere increased slightly from $747,664 in November to $748,011 in December, which was up 25.6% for the year.

The North Shore posted modest increases in December, with an average value of $1,089,745 compared to $1,088,059 in November but December's figure was still up 22% for the year.

The biggest rises in housing values in December were on Auckland's northern and southern flanks, with average values continuing to rise strongly in Rodney, Papakura and Franklin.

The average value of all homes in the Auckland region rose from $931,807 in November to $933,264 in December, up 22.5% compared with December 2014.

The biggest value increases in Auckland during the year were in south Auckland, with average values in Papakura up +29.9% in December compared to a year earlier, followed by Manukau Central +29.3% and north west Manukau +28% (refer chart below).

Changes starting to bite

However the figures also suggest the rate of growth in property values in Auckland is slowing.

In November last year the average value of Auckland homes was up 24.4% compared to a year earlier, but in December that had fallen back to 22.5%.

In Waitakere the annual increase in average values dropped from 28.4% in November to 25.6% in December, on the North Shore it dropped form 24.1% to 22%, and in Central Auckland it dropped from 22.8% to 20.7%.

QV national spokesperson Andrea Rush said tougher LVR restrictions for Auckland property investors and new tax rules for property buyers who sell houses within two years had slowed the Auckland market towards the end of last year. Foreign buyers also now have to register with the IRD and have a New Zealand bank account. (A clamp down by the Chinese government on money flowing out of China has also been cited as helping slow the Auckland housing market).

"Following the introduction of the new measures in October and November, the rate of growth in the Auckland market slowed, while values in many other centres including Wellington and Dunedin saw significant value increases," Rush said.

It is also likely that the full effects of the changes are not yet showing up in QV's figures because it can take two or three months or even longer from the time a sale price is agreed for it to flow through to QV's valuation updates.

Strong growth in Tauranga & Hamilton

In most parts of the country outside of Auckland, December's average values continued to rise compared to November and December 2014.

There were particularly strong rises in Hamilton where December's average of $444,211 was up 19.5% on a year earlier and in Tauranga where December's average of $541,881 was up 18.2% for the year.

But growth in values was much more subdued around the rest of the country, with the annual increase in average values in all districts south of the upper North Island (except Queenstown Lakes and the MacKenzie country) confined to single digits.

In Wellington the average value of homes was $569,370 in December, up 5.2% compared to a year earlier and in Christchurch the average value was $482,043 in December, up just 2.6% for the year.

In Dunedin the average value was $308,944 in December, up 5.7% for the year and in Queenstown-Lakes it was $776,671, up 12.1%.

QV Average Residential Property Values $
Area	Dec-14	Nov-15	Dec-15	Annual Change
Auckland Region	761,858	931,807	933,264	22.5%
Wellington Region	453,366	468,902	476,634	5.1%
Main Urban Areas	575,053	667,220	669,091	16.4%
Total NZ	488,674	555,729	558,146	14.2%
Far North	308,125	328,038	328,687	6.7%
Whangarei	337,190	373,559	380,592	12.9%
Kaipara	339,643	357,569	365,763	7.7%
Auckland - Rodney	686,579	801,398	815,353	18.8%
Rodney - Hibiscus Coast	681,661	789,822	804,163	18.0%
Rodney - North	692,586	814,954	828,212	19.6%
Auckland - North Shore	893,263	1,088,059	1,089,745	22.0%
North Shore - Coastal	1,016,669	1,244,613	1,244,765	22.4%
North Shore - Onewa	727,282	877,753	878,235	20.8%
North Shore - North Harbour	860,260	1,048,381	1,053,882	22.5%
Waitakere	595,498	747,664	748,011	25.6%
Auckland - City	907,819	1,095,480	1,095,838	20.7%
Auckland City - Central	789,752	951,386	950,815	20.4%
Auckland_City - East	1,137,909	1,367,684	1,373,235	20.7%
Auckland City - South	819,352	994,392	991,153	21.0%
Auckland City - Islands	767,788	900,946	906,239	18.0%
Auckland - Manukau	630,167	796,950	796,027	26.3%
Manukau - East	825,278	1,019,388	1,021,890	23.8%
Manukau - Central	479,063	622,567	619,257	29.3%
Manukau - North West	529,243	676,901	677,480	28.0%
Auckland - Papakura	463,342	595,557	601,717	29.9%
Auckland - Franklin	483,529	575,259	580,110	20.0%
Thames Coromandel	507,093	544,861	546,926	7.9%
Hauraki	238,356	262,553	271,721	14.0%
Waikato	287,059	330,568	344,298	19.9%
Matamata Piako	278,741	303,531	308,130	10.5%
Hamilton	371,819	435,848	444,211	19.5%
Hamilton - North East	468,100	554,583	561,436	19.9%
Hamilton - Central & North West	344,506	406,515	416,497	20.9%
Hamilton - South East	342,030	396,811	406,574	18.9%
Hamilton - South West	328,673	383,684	392,860	19.5%
Waipa	347,999	381,310	389,792	12.0%
Otorohanga	182,165	N/A	226,071	24.1%
South Waikato	130,477	144,039	139,451	6.9%
Waitomo	136,179	145,655	147,515	8.3%
Taupo	337,511	356,724	362,444	7.4%
Western BOP	423,562	452,944	464,732	9.7%
Tauranga	458,521	525,758	541,881	18.2%
Rotorua	269,876	291,963	295,082	9.3%
Whakatane	302,299	307,205	310,290	2.6%
Kawerau	103,391	103,741	110,062	6.5%
Opotiki	197,082	N/A	215,732	9.5%
Gisborne	225,617	232,128	230,662	2.2%
Wairoa	147,069	145,867	148,126	0.7%
Hastings	297,673	317,612	322,613	8.4%
Napier	328,251	338,960	343,843	4.8%
Central Hawkes Bay	201,592	213,234	219,067	8.7%
New Plymouth	357,617	373,450	372,385	4.1%
Stratford	201,493	213,471	209,578	4.0%
South Taranaki	185,794	188,755	188,235	1.3%
Ruapehu	138,465	131,274	133,390	-3.7%
Whanganui	182,365	184,696	189,161	3.7%
Rangitikei	142,772	144,644	146,693	2.7%
Manawatu	242,304	252,439	253,559	4.6%
Palmerston North	289,439	298,847	301,466	4.2%
Tararua	150,712	150,797	154,386	2.4%
Horowhenua	203,725	210,957	213,309	4.7%
Kapiti Coast	377,868	388,890	390,917	3.5%
Porirua	379,342	391,273	397,607	4.8%
Upper Hutt	334,652	344,625	347,249	3.8%
Hutt	369,261	383,531	388,177	5.1%
Wellington	541,093	558,211	569,370	5.2%
Wellington - Central & South	552,105	564,985	573,201	3.8%
Wellington - East	592,682	608,460	624,730	5.4%
Wellington - North	471,642	489,284	499,707	6.0%
Wellington - West	614,826	643,393	657,850	7.0%
Masterton	236,537	241,442	243,648	3.0%
Carterton	260,467	260,614	265,700	2.0%
South Wairarapa	298,231	311,263	316,877	6.3%
Tasman	414,947	434,123	436,255	5.1%
Nelson	410,363	424,022	428,608	4.4%
Marlborough	346,589	362,991	366,057	5.6%
Kaikoura	343,478	N/A	369,868	7.7%
Buller	202,019	191,377	189,415	-6.2%
Grey	224,530	212,192	202,218	-9.9%
Westland	227,620	229,912	231,455	1.7%
Hurunui	346,738	358,486	356,101	2.7%
Waimakariri	414,248	417,122	417,036	0.7%
Christchurch	469,742	480,464	482,043	2.6%
Christchurch - East	351,189	364,385	366,011	4.2%
Christchurch - Hills	626,857	649,558	653,696	4.3%
Christchurch - Central & North	551,899	565,568	567,476	2.8%
Christchurch - Southwest	449,896	455,177	455,464	1.2%
Christchurch - Banks Peninsula	486,868	487,377	489,905	0.6%
Selwyn	510,418	522,414	524,346	2.7%
Ashburton	328,349	338,255	341,748	4.1%
Timaru	289,474	312,663	314,046	8.5%
MacKenzie	291,749	330,962	328,640	12.6%
Waimate	200,937	210,944	215,195	7.1%
Waitaki	221,790	230,138	232,366	4.8%
Central Otago	318,988	337,421	344,080	7.9%
Queenstown Lakes	693,045	756,665	776,671	12.1%
Dunedin	292,220	306,614	308,944	5.7%
Dunedin - Central & North	300,925	323,425	324,600	7.9%
Dunedin - Peninsular & Coastal	270,935	280,648	277,251	2.3%
Dunedin - South	278,627	287,399	291,984	4.8%
Dunedin - Taieri	304,430	316,037	319,020	4.8%
Clutha	165,335	167,203	163,669	-1.0%
Southland	205,423	212,662	212,616	3.5%
Gore	184,210	184,396	183,917	-0.2%
Invercargill	204,705	214,880	215,327	5.2%

No chart with that title exists.

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32 Comments

by murray86 | 13th Jan 16, 12:32pm 1452641522

Is it the effect of Government legislation or is it the Jafa malaise spreading out of Jafaville to the regions? As percentage returns reduce in AK, any investor would be looking to go where they are better. I think this would have happened without the Governments input IMHO.

by MortgageBelt | 13th Jan 16, 12:32pm 1452641550

Regional city property values needs a lot of catch up, as prices have been flatlining since 2009.

by sharetrader | 13th Jan 16, 12:38pm 1452641914

thats because wage growth in the regions is also flat and more of the houses are owner occupied so people are more cautous as to what they can afford.
as so as the investors head there watch the prices shot up

by MortgageBelt | 13th Jan 16, 12:38pm 1452641908

Regional cities don't have 1000s of 'ghost' empty houses owned by offshore 'investors' or laundry-persons (yet). But they are starting to attract retirees from Auckland - economic migrants.

by rastus1 | 13th Jan 16, 1:26pm 1452644809

...though in my travels I note quite a few empties popping up around Hamilton - though some appear to have the little old person baracaded inside (culturally shy?) - windows shut tight, curtains drawn..the odd glimpse of a shadow if you happen to be going past at the right time. No doubt 'minding' the foreign investment for yonder investor.

What a shambles John Key has let develop in our housing market. What a hopeless disgrace of a PM he is.

by scarfie | 13th Jan 16, 12:49pm 1452642585

My father settled in November, I reckon his timing might be pretty good to catch the peak in Auckland. But then he has inflated the prices in one district by buying there. Mind you, he kept the majority in cash so he can spend it on travel ie: not spend it in New Zealand.

by Boatman | 13th Jan 16, 12:55pm 1452642938

To answer the rhetorical question with a question ............. Who cares ?

Unless you are and Aucklander realising the "profit" in an investment property , emigrating from NZ , or retiring to the wop-wops , the whole excersize is academic , if you sell you have to buy again in the same over-inflated market (or rent) so its pretty much a zero sum gain for most of us

by sharetrader | 13th Jan 16, 1:09pm 1452643799

except with the rise in prices also brings about a rise in expenses for owning the house, sorry i would rather have a cheaper house and more money to spend than have my house going up and rates, insurance etc following suit

by sadr001 | 13th Jan 16, 1:28pm 1452644898

Rates don't go up because house prices go up, they go up because we have a far left mayor who can't tell the difference between 3% and 9.9% . Your rates will go up by more than someone else's if your property value rises by more than theirs and you are both in the same region because the total increase for the region is decided beforehand and then allocated across households.

by sharetrader | 13th Jan 16, 2:55pm 1452650145

wrong check again rates are calculated on the value of your property it detemines which band you fall into and they havent moved the bands much so if your property goes from 500k to 750 k you now pay 2350 instead of 1733 or even worse if you house goes above a Mil now 2967 , an extra 1200 on five years ago
Rates for 2015/2016 will be calculated using property values from the November 2014 revaluation. In the three years since we last set the rates, residential properties in Auckland increased in value by an average of approximately 34per cent. The new property values will have no impact on the total amount of rates collected by council. Property values simply help to determine how rates are shared across ratepayers

http://www.aucklandcouncil.govt.nz/en/ratesbuildingproperty/ratesvaluat…

by Donald Ellis | 13th Jan 16, 3:13pm 1452651206

not quite, sharetrader.

Unlike central government councils work backwards. First they calculate what their budget will be then they work out how much of that has to be raised through rates. Once they have done that they use property values purely as a way of divvying up the rates burden and introducing a little progressivity into it.

As property values go up the multipliers a council uses go down. I know it is hard to believe but rates in Auckland have not gone up by 50% in the last few years even though property values have.

So you are right in the end that the total rates take doesn't change just because property values move. But the only time your rates go up automatically because of a change in value is when that change is relative to other properties. When all properties go up nothing changes in rates (not automatically anyway).

by sharetrader | 13th Jan 16, 3:24pm 1452651886

all i know is i am now in the higher band so am paying more a lot more, and all because of crazy Prices increases in my area, in fact our area had one of the highest increases in the last rates round due to it.
and so by saying your house price does not affect what you will pay is wrong
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11471241

by Donald Ellis | 13th Jan 16, 3:32pm 1452652373

" crazy Prices increases in my area" - that's probably your answer. It is the relative increase in values in your area compared to other areas that is more likely to blame.

It is sometimes hard to tell because, for many reasons, councils have tended over the last 15 years to increase rates by more than CPI. So people like you get a double whammy. And it sounds like it's biting pretty hard.

by sharetrader | 13th Jan 16, 3:43pm 1452653037

crazy Prices increases in my area"
this house is not even on the good side, you look over mangroves at industrial area with massive power lines running overhead and the street is only one of three in the middle of mangere bridge industrial estate.
the problem is this type of sale pushes up the values around it and this is only one example there was plenty of this going on last couple of years mostly investors, good on the locals that took the money and ran but for those of us that stayed we ended up with a 16.9% increase in cost to carry on living there
http://www.stuff.co.nz/life-style/home-property/68598011/auckland-house…

by Andrewj | 13th Jan 16, 3:49pm 1452653366

http://www.zillow.com/homedetails/607-Cove-Rd-Saint-Michaels-MD-21663/3…{scid=hdp-site-map-bubble-address}

by sharetrader | 13th Jan 16, 3:53pm 1452653604

And it sounds like it's biting pretty hard.
its not that i just hate passing my money over to any government department or council to spend as having worked for them out of school years ago i know how inefficent they are and how many nobbies work for them that cant get a real job

by kiwichas | 13th Jan 16, 4:44pm 1452656651

Should not moan about rates when you have had massive tax free capital gains; some people should get out more often rather than sitting worrying about how much their house is worth now, Oh dear I've made 500K, now my rates will go up!! Spare us all(particularly non property owners)...

by steven | 13th Jan 16, 3:49pm 1452653365

Rates are determined on what the council wants as an income. value bands etc just determine how much you pay.

I am also not sure on the 3 years either, ie some councils are doing it more frequently in order to pick up extra $s?

by sharetrader | 13th Jan 16, 3:58pm 1452653911

thats the point its called income creep they do it with taxes too, if you only adjust the bands by rate of CPI you can capture a bigger proportion moving up a band and paying more, and who in their right mind wants to hand over more money to a government or council. it just encourages politicians to think of ways of leaving a legacy about themselves

by Donald Ellis | 13th Jan 16, 4:01pm 1452654067

No it's a legal thing. The revaluations are supposed to happen at least every three years. Ratepayers pick up the tab so it's unlikely to be done any more frequently.

Seriously, property values up or property values down makes no difference at all to total rates take.

This is the mechanism they use:

- they have a big spreadsheet with every current rateable property and its value in it
- the accountant gets told at a budget (=Ten Year Plan/Annual Plan) meeting what the target for rates collection is
- the accountant iteratively adjusts the multiplier (i.e. a percentage of a property's value) until the number at the bottom is the one they want

If all houses double in value overnight councils simply halve the multiplier (all other things being equal).

by ACB | 13th Jan 16, 1:16pm 1452644185

Yes, it doesn't matter if you are already a home owner without having to borrow more or use additional equity to buy something else (and that might be most of us...currently) but the reality is that plenty of people have geared up to chase this thing or allocated their savings into a non productive and illiquid asset. So on one level yes, maybe you personally are not directly affected but on another level, we may all pay the price for overinflated property markets and the inadequate savings and high debt levels that they cause.

by Crazy Horse | 13th Jan 16, 1:21pm 1452644482

Where are all the Awklund property spruikers now ??? ...C'mon I was relying on your ilk to push the median price to $1 mill !! ..... oh well, it was fun while it lasted.

Cue the "maximum immigration, "shortage" of houses, lowest interests rates ever and "best" place to
live brigade" to chime in and say "this property party never ends" because it's MY party ...... it is all based on "fear and greed" - be greedy when others are fearful and fearful when others are greedy - Warren Buffet

by bigblue | 13th Jan 16, 3:13pm 1452651185

Crazy Horse - as soon as the 12,000 foreign investors get their IRD number processed (bit of a backlog at IRD at the moment) then they will start buying again. I predict that the $1m will be reached in the Feb/Mar/Apr period - it has to happen - net migration at record levels, interest rates at record lows, housing inventory low, not enough being built and not enough tradespeople available to build enough to keep up with demand (20,000 shortfall in 2015 alone) etc etc. Just watch this space - the $1m is on it's way!

by Zombie ponzi | 13th Jan 16, 3:29pm 1452652156

You must be talking average price rather than median?

by Crazy Horse | 15th Jan 16, 8:47pm 1452844059

Good evening bigblue ....I am hoping that the Chinese et al get back into the Auckland market at "full tilt" .......so l can sell !!

Take the money and run !!

by workingman | 13th Jan 16, 1:26pm 1452644782

As it happens, property concerns come into a tape leaked to me. I’ll transcribe it all, so nothing is out of context:

‘Hello, is this the secret number?’

‘Yep, sure is. Who’s this?’

‘John Key. You know. I’m mates with Richie McCaw.’

‘You got us into all that Cameron Slater stuff?’

‘Shhh! ForChrissakes… Anyway it wasn’t me.’

‘So what’s it now then?’

‘It’s about the US missile shield thing.’

‘That’s secret. What do you want to know?’

‘Just some information. It’s important.’

‘I’ll ask. [Quiet, unintelligible] ‘He’s mates with Richie McCaw’.

[New voice] ‘OK. Fire away. But if this comes up in that blog thing.’

‘How could it? Trust me. Listen. The US missile shield. Does it reach right over my place?’

‘Your place? No. Doesn’t come near it.’

‘What? I’m sure it does. It should. It must.’

‘Not on the map, mate. Not your place. Nowhere near. Not my place either.’

‘I’m not talking about your place. Why do you think I care about your place?’

‘You should see my valuations… Wow, month after month… I guess you’re the one to thank…’

‘OK. You’re rich. Everyone wants to be rich. But what about my place?’

‘No. Like I said, nowhere near.’

‘But it must be. It’s part of the US.’

‘The US? Last I heard we were joining up with China. Their embassy lent us the new guy over there. You’d be amazed what he knows.’

‘Will you listen to me?! My place...’

‘First thing he said. Your place part of China now.’

‘China? Hawaii’s not part of China!’

‘Hawaii? What’s Hawaii got to do with it?’

‘My place, you fool! The missile shield! The map!’

‘It’s right here. Auckland. A new map of New Zealand. 2014’

‘Auckland?! New Zealand?! Stuff Auckland! [unclear] New Zealand! Who cares about New Zealand?! I want to know about Hawaii. My house... Hawaii!!’

‘I’ll get the atlas…’

‘For pity’s sake! [unclear] Everywhere. Lunatics.’

‘Oh yes, I see, Hawaii’s covered. It’s a state I think.’

‘All of it? You’re sure? My whole house is right under the shield?’

‘Looks like it to me.’

‘The whole place? Right inside the line… No part sticking outside? The ensuite?’

[Tape breaks here]

by jerry_NZ | 13th Jan 16, 3:45pm 1452653118

the problem is that there may be a flattening try to buy anything that ticks a lot of boxes - 1300 listings on TradeMe - lowest ever. If you want something nice, reasonably priced - you have to pay!.

by zippy | 13th Jan 16, 4:18pm 1452655110

Listing always go down to 1300 over the holiday season, it'll return to over 2000 in Feb/March.

by bloodymigrant | 13th Jan 16, 5:42pm 1452660173

Many so called economist been posting comments from last two years, that house price will go down!! As I said it won't go down, it might stay stable or go up.

by Sluggy | 13th Jan 16, 6:20pm 1452662426

As the RBS mentioned today... In a crowded hall, exit doors are small

Maybe not this year, but never say never.

by bloodymigrant | 13th Jan 16, 5:44pm 1452660240

It's time to buy houses.

by mandalay | 14th Jan 16, 8:50am 1452714616

Correct bloodymigrant. New Zealand most expensive country in the world to buy - this on CNBC this morning! This is 2016's most pricey country http://video.cnbc.com/gallery/?video=3000480036

RBNZ and government clamp down on residential property investors & offshore buyers starting to bite in Auckland as housing values flatten with other regions still rising

QV Average Residential Property Values $

32 Comments