Archive | Quotable Value

Home value falls more common

Falls in residential property values became more common both in Auckland & nationally over the last 3 months, according to Quotable Value Ltd’s monthly statistics. The annual gain in Auckland turned into a decline when adjusted for inflation.

Around Auckland, the only gains in the last 3 months were in Onewa on the North Shore (0.6%) & Franklin (1.2%). Central Manukau was unchanged, the region & all other areas within it dipped.

In just a few areas the dip extended to 12 months – the central isthmus by 0.8% over 12 months, 2.5% over the last 3 months; the Hibiscus Coast by 0.5% over 12 months, 0.1% over 3 months; and in one of the region’s most expensive areas, Manukau’s eastern suburbs, by 0.5% over 12 months, 0.2% over the last 3 months.

QV’s index showed a 0.8% gain for Auckland over the last year, but a 0.7% decline when adjusted for inflation. Nationally, the 12-month gain was 4.6%, falling to 3.1% when adjusted for inflation.

Fringes getting transformed

QV general manager David Nagel said: “The onset of spring has seen a significant rise in listings, although quarterly value growth remains modest, with low supply & stable interest rates keeping values at their current levels.

“Despite slow quarterly growth, annual growth rates remain strong, particularly in areas where first-homebuyer activity is relatively high such as Porirua, Upper Hutt & Dunedin City, as well as many other smaller regional towns.”

“While market activity doesn’t appear dramatic on the surface, there is plenty happening behind the scenes. Investors & first-homebuyers continue to transform the makeup of more affordable areas on the outskirts of our city centres. Investors, in particular, are attracted to these areas due the higher yields attainable in the likes of the Hutt Valley & Porirua.”

“We continue to see increased demand for different types of property. Population growth coupled with affordability constraints is driving demand for semi-detached units & apartments in our main centres. With these market changes set to continue, I expect this trend will become increasingly relevant in future years.”

Below, the dollar figure is the average value for September. The first percentage is for the 3 months to September, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,047,415, -0.7%, 0.8%, 91.7%
Rodney, $949,953, -0.6%, 1.1%, 62%
North, $968,436, -1.0%, 2.3%, 61.2%
Hibiscus Coast, $932,696, -0.1%, -0.5%, 58.8%
North Shore, $1,216,511, -0.8%, 1.8%, 88.5%
Coastal, $1,389,625, -0.9%, 1.9%, 84.4%
Onewa, $979,893, 0.6%, 1.9%, 97.6%
North Harbour, $1,182,468, -2.2%, 1.3%, 94.6%
Waitakere, $824,358, -0.2%, 1.0%, 94.4%
Auckland City, $1,234,458, -1.1%, 0.7%, 98.3%
Central, $1,070,764, -2.5%, -0.8%, 88.0%
East, $1,564,278, -0.3%, 2.1%, 96.3%
South, $1,099,591, -0.5%, 0.0%, 104.3%
Islands, $1,095,412, -5.4%, 0.6%, 71.4%
Manukau, $898,133, -0.5%, 0.0%, 96.2%
East, $1,152,518, -0.2%, -0.5%, 93.4%
Central, $699,180, 0.0%, 1.6%, 86.0%
North-west, $774,411, -0.9%, 0.3%, 109.6%
Papakura, $699,928, -0.4%, 3.1%, 94.6%
Franklin, $670,094, 1.2%, 1.1%, 69.4%

Northern border, down country & nationally:

Whangarei, $534,846, 1.1%, 6.8%, 35.0%
Kaipara, $543,311, 0.6%, 5.4%, 37.0%
Waikato, $478,200, -0.5%, 8.2%, 58.0%
Hamilton, $572,169, 2.4%, 4.7%, 58.3%
Tauranga, $709,339, 1.4%, 3.3%, 47.3%
Gisborne, $325,301, 5.1%, 103%, 9.4%
Wellington region, $664,418, 1.6%, 9.6%, 45.8%
Christchurch, $493,922, -0.2%, 0.5%, 30.2%
Queenstown Lakes, $1,169,834, -0.4%, 8.3%, 70.1%
Dunedin, $420,127, 2.4%, 10.4%, 46.8%
Invercargill, $277,379, 4.7%, 13.4%, 25.8%
Total NZ, $676,427, -0.6%, 4.6%, 63.2%

Attribution: QV tables & release.

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House price index down overall in last quarter, Auckland mostly down

Published 7 September 2018
The 2 leading price-rise districts in Auckland – the southern suburbs on the isthmus & the north-west of the former Manukau City – reached a 100% increase over the 2007 peak 2 years ago, carried on rising and are still 105-110% above, though they’ve fallen slightly in recent months.

Several other areas around the region remain 90%-plus above that 2007 peak, but declines over 3 months are more common and a number of areas are down from a year ago.

Around the country those 10-year rises are much smaller, but rises in the last year have been stronger than in Auckland. Over the last 3 months there’s a mix of ups & downs, but the overall national index compiled by Quotable Value Ltd (QV) has fallen.

In the QV assessment this week, first-homebuyers & low supply remained key market forces: “First-homebuyers continue to benefit from less competition and are driving modest value growth, particularly in low- to mid-value areas. Constrained housing supply, coupled with a stable interest rate environment, is another key market driver supporting a seemingly steady market.”
The QV index rose 4.8% over the last 12 months, 3.3% when adjusted for inflation. The Auckland index rose 0.7% over 12 months, but fell 0.8% when adjusted for inflation.

QV general manager David Nagel said: “It appears to be very much business-as-usual across the national property market, as low levels of supply coupled with a record low interest rate environment drive modest value growth across most regions.”

“Affordability constraints continue to change buyer behaviour. We’re seeing an increase in demand for more affordable 2-bedroom semi-detached units as well as apartments, particularly in our main centres. With population growth projected to continue to rise, I’d anticipate these types of properties will attract even more demand in future years, particularly in Auckland & Wellington City.”

Below, the dollar figure is the average value for August. The first percentage is for the 3 months to August, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,048,956, -0.4%, 0.7%, 91.9%
Rodney, $949,398, -0.5%, 0.4%, 61.9%
North, $966,967, -1.0%, 0.5%, 61.0%
Hibiscus Coast, $933,123, 0.0%, 0.2%, 58.9%
North Shore, $1,213,982, -11%, 1.1%, 88.1%
Coastal, $1,389,536, -1.1%, 1.1%, 84.4%
Onewa, $970,843, -0.3%, 1.5%, 95.7%
North Harbour, $1,183,366, -2.2%, 0.3%, 94.7%
Waitakere, $821,585, -0.4%, 0.6%, 93.8%
Auckland City, $1,240,833, -0.2%, 0.7%, 99.3%
Central, $1,065,840, -3.3%, -1.7%, 87.1%
East, $1,065,840, 0.7%, 2.1%, 97.6%
South, $1,107,286, 1.0%, 0.6%, 105.7%
Islands, $1,184,304, 4.8%, 6.1%, 85.3%
Manukau, $898,657, -0.1%, -0.1%, 96.3%
East, $1,148,387, -0.7%, -1.6%, 92.7%
Central, $699,957, 0.9%, 2.5%, 86.2%
North-west, $777,534, 0.3%, 0.6%, 110.5%
Papakura, $703,125, 0.1%, 5.5%, 95.4%
Franklin, $668,987, 0.3%, 1.9%, 69.1%

Northern border, down country & nationally:

Whangarei, $531,418, 0.8%, 6.8%, 34.1%
Kaipara, $536,222, -0.9%, 43%, 35.2%
Waikato, $476,307, -1.3%, 5.8%, 57.3%
Hamilton, $559,190, 0.3%, 2.7%, 54.7%
Tauranga, $705,383, 0.7%, 1.6%, 46.5%
Gisborne, $318,788, 3.1%, 8.7%, 7.2%
Wellington region, $656,676 , 0.9%, 8.5%, 44.1%
Christchurch, $494,476, -0.2%, 0.3%, 30.3%
Queenstown Lakes, $1,161,159, -1.0%, 5.7%, 68.8%
Dunedin, $415,888, 1.7%, 10.7%, 45.3%
Invercargill, $272,855, 3.3%, 13.3%, 23.7%
Total NZ, $672,504, -1.6%, 4.8%, 62.3%

Attribution: QV tables & release.

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Auckland residential index still sliding

Quotable Value Ltd’s rolling 3- & 12-monthly residential index readings for the Auckland region showed the overall slide in the region’s property values continued in July, although the picture is not uniform and it doesn’t show in the graph above.

The graph shows a quite different story when the index is taken back to a 2003 starting point – neck & neck at the top of value gain are Auckland & Hamilton. QV’s figures, back to late 2007, show Auckland up 92% since then and Hamilton up 55%.

Back to the latest figures: Somehow Auckland City (the isthmus – QV is still working on the pre-2011 boundaries) managed a quarterly uplift, improving from a 0.3% gain over 12 months to a 0.5% gain for the last 3 months, although only the southern suburbs on the isthmus turned around, going from a 0.1% decline over 12 months to a 1.2% rise in the last 3 months.

The one other part of the region to pick up value was Manukau east, going from a 1.2% decline over 12 months to zero movement for the last quarter.

For the rest of the region’s indexes, the values for the last 3 months showed a decline from the 12-month figures, or a standstill, but it’s not all downward.

2 years ago, the Auckland City index registered an 86.9% gain since the end of the pre-global financial crisis boom in late 2007. By last Christmas, it was hovering just above a 100% gain (sitting on 100.1%), but dropped to 99% in February, leaving 2 areas in the region with +100% gains over the 10 years – those southern suburbs on 105.1% and north-west Manukau on 111.6%.

Around the country, some places have shown strong value increases over the last 3 or 12 months, but generally the long-term value increases have been much lower than in Auckland.

QV’s assessment

QV said in its monthly assessment: “Lower value, more affordable properties are selling at a faster rate, due to continued demand from first-homebuyers. Our analysis shows that most property transactions are taking place at the low-to-medium price bracket, a section of the market where value growth remains comparatively strong despite relatively static average house values across the country.”

The index showed nationwide residential property values for July increased 5.1% over the last year, but fell 0.7% over the last 3 months. The nationwide average value is now $673,797. Adjusted for inflation, the nationwide annual increase fell to 3.5%.

The index for the Auckland region rose 0.6% over 12 months, but fell 0.9% when adjusted for inflation.

First-homebuyer interest stays strong

QV general manager David Nagel said first-homebuyer activity remained relatively strong in most of New Zealand, but had fallen in some areas in recent months: “This could possibly be due to the fact that some buyers are holding off purchasing, hoping they’ll attain a KiwiBuild property in the ballot.”

As for residential investors, Mr Nagel said: “Dunedin continues to buck the trend, with investors accounting for a growing portion of buyers, according to the latest Core Logic buyer classification data. With an average value of $411,669, investors are attracted by relatively low values & strong yields. Investor activity has dropped over most our main centres, partly due to the bank’s LVR (loan:value ratio) restrictions and a period of consolidation after recent growth.

“With overall market conditions remaining strong, such as record low interest rates & strong local economies, I would anticipate that values will remain fairly stable for the remainder of winter.”

Auckland entry-level properties still selling

In Auckland, senior QV consultant James Steele said: “A return to ‘normal’ market conditions continues as values remain stable under depressed levels of activity.

“Despite the fact that investor activity has dropped, entry-level properties, especially those which are well presented & under $650,000, continue to transact in a market experiencing depressed levels of activity. This is understandable given the current affordability challenges & built-up demand from first-homebuyers.

“We’re continuing to see a high proportion of properties come to market as price by negotiation as opposed to auction, largely due to reduced demand created by stricter lending conditions.

“With less demand, sellers are adjusting expectations and are more open to negotiation in order to get their property sold. In general, this has limited the value growth seen over the previous period and kept prices stable, with some softening occurring in properties which have issues or are poorly presented.”

“Well presented properties which offer a good family living environment, or those which have straightforward development potential, are still transacting at reasonable levels. However, demand is patchy and timing – together with supply in any given suburb – is playing a large part. The premiums paid prior to the 2016 LVR restrictions are rarely found under current conditions.

“Over the coming months, we anticipate the continuation of the ‘normalised’ market conditions experienced over the past year, and expect minor fluctuations in price through the winter months coming from those under pressure to sell. At this stage, any further downward pressure on property prices is likely to come from regulatory change or wider economic risks.”

Below, the dollar figure is the average value for July. The first percentage is for the 3 months to July, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,050,778, -0.1%, 0.6%, 92.3%
Rodney, $947,336, -1.1%, -0.2%, 61.5%
North, $968,829, -0.9%, -0.3%, 61.3%
Hibiscus Coast, $926,604, -1.4%, -0.1%, 57.8%
North Shore, $1,224,301, -0.7%, 1.8%, 89.7%
Coastal, $1,399,765, -1.3%, 1.4%, 85.8%
Onewa, $971,037, 0.0%, 2.0%, 95.8%
North Harbour, $1,209,171, -0.4%, 2.4%, 99.0%
Waitakere, $824,055, -0.1%, 0.6%, 94.3%
Auckland City, $1,238,979, 0.5%, 0.3%, 99.0%
Central, $1,070,104, -1.5%, -1.2%, 87.9%
East, $1,570,660, 1.3%, 1.6%, 97.1%
South, $1,104,286, 1.2%, -0.1%, 105.1%
Islands, $1,147,678, 0.5%, 3.8%, 79.5%
Manukau, $901,504, 0.2%, 0.3%, 97.0%
East, $1,152,975, 0.0%, -1.2%, 93.4%
Central, $698,565, 0.1%, 1.7%, 85.8%
North-west, $781,699, 0.4%, 1.9%, 111.6%
Papakura, $702,466, 0.2%, 4.0%, 95.3%
Franklin, $665,311, -0.8%, 1.0%, 68.2%

Northern border, down country & nationally:

Whangarei, $528,543, 3.2%, 6.9%, 33.4%
Kaipara, $539,471, 2.8%, 3.4%, 36.0%
Waikato, $473,429, -10%, 5.2%, 56.4%
Hamilton, $558,615, 0.8%, 3.3%, 54.5%
Tauranga, $702,850, -0.2%, 1.7%, 46.0%
Gisborne, $312,693, 0.8%, 6.9%, 5.2%
Wellington region, $651,725, 1.5%, 7.4%, 43.0%
Christchurch, $495,692, 0.5%, 0.1%, 30.7%
Queenstown Lakes, $1,168,728, 3.4%, 7.0%, 70.0%
Dunedin, $411,669, 1.8%, 10.1%, 43.8%
Invercargill, $266,950, 0.9%, 9.9%, 21.0%
Total NZ, $673,797, -0.7%, 5.1%, 62.6%

Attribution: QV tables & release.

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Auckland short-term housing index slips, national rises, long-term margin still wide

Auckland’s housing index fell 0.3% over the last year when adjusted for inflation, but Quotable Value Ltd’s national index rose 4.6%.

Unadjusted, the index for the Auckland region fell 0.2% over the last 3 months and was up only 0.8% over the year. The national index was also lacklustre over 3 months unadjusted, down 0.3%, but has performed more strongly over 12 months, rising 5.7%.

The big difference between Auckland and the rest of the country has been the longer-term growth in Auckland, where the index has risen 92.8% since the market peak at the end of 2007, when the global financial crisis started to kick in. Nationally, the unadjusted index is up 63.1% since 2007.

At the bottom of the country, Invercargill’s index rose 1.3% over the last 3 months, is up 9.7% for the last year but is only 20.2% ahead of its level at the end of 2007, when the global financial crisis started to kick in.

And at another of the nation’s extremities, Gisborne, the index has risen 8.9% over 12 months but has risen only 4.7% since 2007.

Inflated vendor hopes evident

QV general manager David Nagel said today valuers had observed “challenges around managing seller expectations” on prices: “After a sustained period of national value growth, sellers can sometimes have an inflated – even unrealistic – view of the value of their property. This is resulting in slower than usual average time to sell properties across some areas.

“In this sense, it’s a buyer’s market. The Reserve Bank’s loan:value (LVR) restrictions, as well as new Government regulations, have reduced investor demand. This has had the effect of reducing competition, giving buyers more time to do their due diligence before purchasing. As a result, regions such as Auckland are seeing an increasing number of sales through negotiation as opposed to auction as vendors show more flexibility in order to sell their property in a less buoyant market.

“Despite the slowdown in activity, there is still plenty going on. A great example of this is in Christchurch, where infrastructure improvements in the city appear to be contributing to demand for new builds in the cbd. With many positive city projects currently on the go, we may continue to see increased demand for city centre property in the coming months.

“The growth of suburbs on the outskirts of our main cities continues. With high values remaining in most of our cities, more affordable suburbs on the outskirts continue to appeal, particularly to first-homebuyers. This is a common theme across Auckland, Tauranga & Wellington in particular.

“In the short term, I wouldn’t anticipate any significant changes to current market conditions. With no changes to the official cashrate likely until September next year at the earliest, and investment demand either remaining constant or dropping across most areas, its likely values will remain fairly constant or steadily grow across most of New Zealand throughout winter.”

Below, the dollar figure is the average value for June. The first percentage is for the 3 months to June, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,053,575, -0.2%, 0.8%, 92.8%
Rodney, $957,145, 0.8%, 0.1%, 63.2%
North, $979,832, 0.0%, -0.5%, 63.1%
Hibiscus Coast, $934,930, 1.6%, 0.7%, 59.2%
North Shore, $1,224,965, -0.9%, 1.8%, 89.8%
Coastal, $1,399,222, -1.6%, 1.6%, 85.7%
Onewa, $972,081, 0.1%, 1.6%, 96.0%
North Harbour, $1.213,442, -0.4%, 1.9%, 99.7%
Waitakere, $826,625, 0.2%, 0.4%, 95.0%
Auckland City, $1,243,037, -01%, 1.2%, 99.7%
Central, $1,083,584, -1.1%, 1.0%, 90.3%
East, $1,564,605, -0.1%, 1.9%, 96.3%
South, $1,105,723, 0.7%, 0.2%, 105.4%
Islands, $1,175,112, 1.5%, 6.9%, 83.8%
Manukau, $903,686, 0.1%, 0.3%, 97.4%
East, $1,155,930, -0.3%, -1.2%, 93.9%
Central, $699,672, 0.1%,2/3%, 86.1%
North-west, $782,457, 0.5%, 1.4%, 111.8%
Papakura, $702,677, -0.1%, 3.7%, 95.3%
Franklin, $662,417, -1.9%, -0.7%, 67.5%

Northern border, down country & nationally:

Whangarei, $525,816, 2.4%, 2.6%, 34.7%
Kaipara, $534,368, 1.6%, 6.7%, 32.7%
Waikato, $483,490, 2.3%, 6.6%, 59.7%
Hamilton, $556,426, 0.2%, 3.2%, 53.9%
Tauranga, $700,305, -0.9%, 1.9%, 45.4%
Gisborne, $311,304, 1.7%, 8.9%, 4.7%
Wellington region, $639,112, -0.8%, 4.8%, 40.2%
Christchurch, $494,707, 0.1%, -0.3%, 30.4%
Queenstown Lakes, $1,152,201, 2.8%, 7.5%, 67.5%
Dunedin, $409,898, 3.0%, 9.2%, 43.2%
Invercargill, $265,151, 1.3%, 9.7%, 20.2%
Total NZ, $675,680, -0.3%, 5.7%, 63.1%

Link: QV index for June, 4 July 2018

Attribution: QV tables & release.

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Mixed picture for Auckland house prices – but a widening gulf between Auckland & rest of NZ

Housing value changes around the Auckland region over the last 3 months look like this: 3 of the old council areas up, 3 down and one no change.

The rolling quarterly measure by Quotable Value Ltd, released yesterday, shows a 3-month shift exceeding 1% either way in only 2 places in Auckland – the central city up 2.6%, the Hauraki Gulf islands down 2.3% (on low counts).

On the super-city’s northern border, Kaipara’s valuation rose 5.1% on a rolling 3-monthly basis. On the southern border, the Waikato District’s valuation rose 2.4%.

Around the country, the latest 3-monthly figures are a mixture. What is clear, though, is that an increased margin has been cemented in place between Auckland (excluding the fringes of Rodney & Franklin) and the rest of the country.

You can see that from the changes in value since the previous price peak at the end of 2007, as the global financial crisis was about to start taking effect.

What was a 32% lead for Auckland compared to the national average at the end of 2007 has stretched out to a 56% lead – even after Auckland’s slowdown over the last 3 years. That’s not a comparison between Auckland and the rest of the country, but between Auckland and the whole country. Auckland v the rest would be a much wider margin, but I don’t have that figure.

In the 3 months to June 2015, the average value for the old Auckland City – the isthmus suburbs – topped $1 million dollars, reaching $1,003,144. It’s now up another 24% at $1,245,086, exactly 100% above the level at the end of 2007. In the eastern suburbs of the isthmus the average value now is $1,561,019, also up 24% since June 2015 but down 0.4% on the 3-monthly basis and showing a 95.9% increase since the end of 2007.

On the Auckland region’s boundaries, Kaipara is showing a 35% gain since 2007 and Waikato 60%. Provincial cities – and Wellington & Christchurch – show increases since 2007 below 50%, in some cases well below.

At the end of 2007, Auckland’s average value was $511,188. Nationally, the average sale price eased from $393,198 in November that year to $388,253 in December.

Below, the dollar figure is the average value for May. The first percentage is for the 3 months to May, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,054,729, 0.1%, 1.0%, 93.0%
Rodney, $959,555, 0.9%, -0.1%, 63.6%
North, $981,881, 0.9%, -1.2%, 63.5%
Hibiscus Coast, $938,303, 0.8%, 0.9%, 59.7%
North Shore, $1,229,088, -0.2%, 2.6%, 90.5%
Coastal, $1,405,224, -0.5%, 2.6%, 86.5%
Onewa, $973,519, 0.1%, 2.1%, 96.3%
North Harbour, $1,219,645, 0.5%, 3.0%, 100.7%
Waitakere, $826,087, 0.1%, 0.0%, 94.8%
Auckland City, $1,245,086, 0.5%, 1.9%, 100.0%
Central, $1,104,053, 2.6%, 2.7%, 93.9%
East, $1,561,019, -0.4%, 2.4%, 95.9%
South, $1,099,787, 0.4%, 0.3%, 104.3%
Islands, $1,154,849, -2.3%, 7.5%, 80.7%
Manukau, $900,190, -0.3%, -0.2%, 96.7%
East, $1,156,963, 0.1%, -1.0%, 94.1%
Central, $693,683, -1.1%, 1.4%, 84.5%
North-west, $776,684, -0.3%, 0.3%, 110.2%
Papakura, $702,157, 0.0%, 2.7%, 95.2%
Franklin, $667,803, -0.9%, -0.5%, 68.8%

Northern border, down country & nationally:

Whangarei, $524,268, 2.7%, 8.5%, 32.3%
Kaipara, $534,005, 5.1%, 3.8%, 34.6%
Waikato, $483,179, 2.4%, 8.8%, 59.6%
Hamilton, $553,873, 1.0%, 3.1%, 53.2%
Tauranga, $700,744, -0.9%, 2.6%, 45.5%
Gisborne, $309,961, 2.7%, 10.1%, 4.3%
Wellington, $754,924, -1.2%, 3.8%, 41.8%
Christchurch, $495,148, 0.1%, 0.0%, 30.5%
Queenstown Lakes, $1,153,155, 3.5%, 9.6%, 67.7%
Dunedin, $408,827, 4.0%, 9.4%, 42.8%
Invercargill, $264,630, 1.8%, 8.8% 20.0%
Total NZ, $677,996, 0.8%, 6.9%, 63.6%

Attribution: QV release.

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House price catchup continues outside Auckland, where they’re static

Quotable Value Ltd’s latest house price index shows prices outside Auckland & Christchurch continued to play catchup in the 3 months to April, while in Auckland the value movements were small for both the last 3 months & last 12 months.

Longer term, the fundamental difference between Auckland and the rest of the country is stark. With the exception of Queenstown, which is vying with Auckland’s eastern suburbs & coastal North Shore for the most expensive spot, values have risen less than 50% since the start of the global financial crisis in late 2007 in all but half a dozen areas around the rest of the country.

In Auckland, house values in the largely rural extremities of Franklin & Rodney (but including the urban Pukekohe & Hibiscus Coast) have gained less than 70% over those 10 years. But on the isthmus, North Shore & ritzier areas of Manukau, and also in the cheaper patches of Waitakere, Manukau & Papakura, the 10-year gains are still mostly in the high 90% region.

In north-west Manukau and the southern suburbs on the isthmus, the gains still exceed 100%.

Quotable Value said the nationwide rise over the last 3 months was 1.1%, and 7.6% for the year, reduced to 6.4% when adjusted for inflation.

For the Auckland region, values dropped 0.3% over the last quarter, were up 0.8% over the year, but dropped 0.3% over the year when adjusted for inflation.

Below, the dollar figure is the average value for April. The first percentage is for the 3 months to April, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Rodney, $958,130, 0.1%, 1.1%, 63.4%
North, $977,649, 0.9%, -0.9%, 62.8%
Hibiscus Coast, $939,821, 1.3%, 1.0%, 60.0%
North Shore, $1,233,394, 0.4%, 3.2%, 91.1%
Coastal, $1,418,758, 0.6%, 3.6%, 88.3%
Onewa, $971,425, -0.6%, 2.4%, 95.8%
North Harbour, $1,214,201, 1.2%, 3.0%, 99.8%
Waitakere, $824,631, 0.2%, -0.2%, 94.5%
Auckland City, $1,232,850, -1.0%, 0.8%, 98.0%
Central, $1,086,879, 0.8%, 0.6%, 90.8%
East, $1,550,784, -1.6%, 1.8%, 94.6%
South, $1,090,785, -1.3%, -0.7%, 102.6%
Gulf islands, $1,142,511, -2.1%, 7.6%, 78.7%
Manukau, $900,095, -0.4%, -0.3%, 96.6%
East, $1,152,825, -0.7%, -1.7%, 93.4%
Central, $697,708, -0.8%, 2.4%, 85.6%
North-west, $778,373, 0.3%, 0.3%, 110.7%
Papakura, $701,123, 0.1%, 1.1%, 94.9%
Franklin, $670,785, -0.4%, 0.2%, 69.6%
Auckland region, $1,051,687, -0.3%, 0.8%, 92.4%

Northern border, down country & national:

Whangarei, $512,326, 0.5%, 7.2%, 29.3%
Kaipara, $524,681,3.5%, 6.4%, 32.3%
Hamilton, $554,452, 1.7%, 2.9%, 53.4%
Tauranga, $704,183, 0.8%, 3.8%, 46.3%
Gisborne, $310,283, 4.7%, 10.9%, 11.3%
Wellington region, $642,156, 1.2%, 6.6%, 40.9%
Christchurch, $493,346, -0.2%, -0.5%, 30.0%
Queenstown Lakes, $1,130,320, 1.2%, 8.5%, 64.4%
Dunedin, $404,539, 3.1%, 8.8%, 41.3%
Invercargill, $264,642, 3.8%, 10.5%, 20.0%
NZ, $678,856, 1.1%, 7.6%, 63.8%

Link: Full QV house price index April 2018

Attribution: QV tables & release.

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Big house index rises becoming rarer

Quotable Value Ltd is still looking for large shifts in house prices to highlight, and there are still some sprinkled around the country.

However, my impression from the QV monthly index figures out last Thursday is that Auckland is at a standstill or sliding slowly, and outside Auckland the catchup is slowing.

The norm for house price escalation is for it to start in central Auckland, spiral around the suburbs and then spin out to the rest of the country.

Smaller & more distant centres such as Gisborne & Invercargill, and many patches of rural New Zealand, will feel little of the rise but may feel some of the subsequent easing. They might regain a little of the margin that expanded when Auckland was experiencing its sharp escalation in prices, but they won’t catch up.

Quotable Value found the “positive” of a 7.3% national value rise over the last 12 months, dropping to 5.6% when adjusted for inflation. In Auckland, QV found values ticking up by 0.4% over the last 3 months & 1% over 12 months, dropping to 0.6% for the year when adjusted for inflation.

The value change over much of Auckland was negative for the last 3 months, and for the last 12 months in a couple of areas.

Regional development could change focus

One factor which might alter the picture favourably for provincial New Zealand is the Government’s new regional development fund, but true success there will only occur with a deepseated change in mindset to create business & job opportunities outside Auckland, not a flurry of cash handouts to support ideas that might have some small success.

When you consider that a 30-minute journey in Auckland will now take 90 minutes at many times of the day, much of that parked in traffic congestion, it should dawn on an increasing number of people how irrational it would be to keep expanding the urban frame to encourage more growth on Auckland’s outskirts.

The new housing on Auckland’s fringes might be marginally cheaper than in suburbs closer to the centre, but transport costs will be higher – unless smart new public transport miraculously appears, or new job centres are developed on those fringes. Some of the transport improvement is coming, but the job centres aren’t.

Success in spreading economic development outside Auckland would lift house prices outside Auckland as well, paid for by people with better incomes & lower costs, but at the moment provincial house prices are following the traditional cyclical pattern.

QV roundup (and you can see that in more detail on the link at the foot of this story)

QV national spokesperson Andrea Rush said: “Residential property value growth remains subdued compared to recent years, but March has seen the usual seasonal pickup in sales volumes & activity.

“This has seen nationwide annual value growth rise to 7.3%, which is the fastest rate in 9 months, but sales volumes are still lower than usual for March.

“Of the main centres, Dunedin leads the way with annual growth of 9.4%, while the Auckland & Christchurch housing markets have seen little value movement over the past year.

“Annual value growth across the Auckland region has slowed from 12.3% in March 2017 to just 1.0% in March 2018, and Christchurch is down 0.6% over the past year.

“The rate of growth has also slowed in the Wellington region, from 21.2% in March 2017 to 8.2% in March 2018.

“The Tauranga & Hamilton markets are still rising, but again at much slower rates than the previous 2 years.

“It’s the regions that continue to see the highest value growth, driven by demand from people looking for more affordable homes or investment properties outside of the main centres.”

Below, the dollar figure is the average value for March. The first percentage is for the 3 months to March, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Rodney, $949,896, 0.9%, 1.0%, 61.9%
North, $979,858, 1.9%, 1.6%, 63.1%
Hibiscus Coast, $920,361, -0.2%, 0.0%, 56.7%
North Shore, $1,235,905, 0.8%, 2.9%, 91.5%
Coastal, $1,422,283, 1.2%, 3.4%, 88.7%
Onewa, $971,511, -1.1%, 2.0%, 95.9%
North Harbour, $1,218,876, 2.2%, 2.9%, 100.6%
Waitakere, $824,848, 0.1%, -0.5%, 94.5%
Auckland City, $1,244,218, -0.1%, 1.2%, 99.9%
Central, $1,095,224, 0.9%, 3.0%, 92.3%
East, $1,566,924, -0.5%, 1.6%, 96.6%
South, $1,097,888, -0.3%, -1.0%, 104.0%
Gulf islands, $1,157,589, -0.3%, 8.5%, 81.1%
Manukau, $903,135, 0.3%, 97.3%
East, $1,159,422, 0.7%, -0.6%, 94.5%
Central, $699,099, 0.5%, 2.6%, 86.0%
North-west, $778,721, 1.2%, 0.4%, 110.8%
Papakura, $703,258, 0.9%, 1.9%, 95.5%
Franklin, $675,378, 1.3%, 1.2%, 70.7%
Auckland region, $1,055,992, 0.4%, 1.0%, 93.2%

Northern border, down country & national:

Whangarei, $517,302, 3.6%, 9.6%, 30.5%
Kaipara, $521,642, 5.1%, 10.7%, 31.5%
Hamilton, $555,549, 2.2%, 4.3%, 53.7%
Tauranga, $706,922, 1.9%, 4.5%, 46.8%
Gisborne, $306,098, 4.3%, 10.6%, 3.0%
Wellington region, $644,567, 2.6%, 8.2%, 41.4%
Christchurch, $494,117, 0.1%, -0.6%, 30.2%
Queenstown Lakes, $1,120,905, 0.8%, 7.5%, 63.0%
Dunedin, $398,120, 1.8%, 9.4%, 39.1%
Invercargill, $261,762, 2.1%, 10.4%, 18.7%
NZ, $677,618, 1.2%, 7.3%, 63.5%

Link: Full March house price index

Attribution: QV tables & release.

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QV sees slight changes in house prices

Quotable Value Ltd’s term for change in residential prices this month is “slightly” – even when it’s a lot, and even when this is about valuation rather than the always positive patter of agency.

According to QV in its monthly house price index release out today, the nationwide average house value was $672,645 at the end of February, up $1114 from $671,531 at the end of January. The increase over the last year was 6.5%, dropping “slightly” to 4.9% when adjusted for inflation. The difference between 6.5% & 4.9% is 160 basis points – 25% less (or 33% more) in a period of supposedly weak inflation.

For Auckland, QV’s “slightly” really was slight – a 0.8% ($8207) rise in average value from 3 months ago to $1,053,948, a period when the declines in Auckland values were limited to the central & eastern parts of the isthmus and the Onewa area of the North Shore.

Auckland’s rise in values over 12 months was 1.0%, reduced to 0.6% (40% less, or 67% more) when adjusted for inflation. QV said the 1% gain over 12 months was slight, as the slowest annual rate of growth since last August.

Unsurprisingly, the upward price spiral began in central Auckland and also slowed first in Auckland, as usually happens. The rest of the country plays catch-up, settling to relative positions according to the differing wealth & economic activity around the regions.

That might change if the new government succeeds in shifting jobs – and some of the population growth – away from Auckland, something the previous government made a token effort at trying last year. The new government’s effort so far is also token, with no indication of how real change might occur.

QV national spokesperson Andrea Rush said “Low interest rates and the easing in the LVR (loan:value ratio) restrictions has seen many more first-homebuyers active in areas where they can still afford to enter the market, while some investors also appear to be becoming more active now they need a slightly lower deposit.”

Below, the dollar figure is the average value for February. The first percentage is for the 3 months to February, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,053,948, 0.8%, 1.0%, 92.9%
Rodney, $951,356, 1.7%, 1.5%, 62.2%
North, $973,369, 1.8%, 1.7%, 62.1%
Hibiscus Coast, $930,503, 1.6%, 1.3%, 58.4%
North Shore, $1,231,179, 1.5%, 2.9%, 90.8%
Coastal, $1,412,965, 2.3%, 3.6%, 87.5%
Onewa, $972,478, -0.2%, 1.0%, 96.1%
North Harbour, $1,214,172, 2.0%, 3.2%, 99.8%
Waitakere, $825,362, 0.5%, 0.8%, 94.7%
Auckland City, $1,239,086, -0.2%, 1.2%, 99.0%
Central, $1,076,464, -0.9%, 1.3%, 89.0%
East, $1,566,834, -0.2%, 1.7%, 96.6%
South, $1,095,706, 0.1%, -0.4%, 103.5%
Islands, $1,181,685, 2.3%, 11.8%, 84.8%
Manukau, $902,791, 1.3%, 0.0%, 97.2%
East, $1,155,919, 1.0%, -0.3%, 93.9%
Central, $701,488, 2.0%, 2.4%, 86.6%
North-west, $779,011, 1.1%, -0.8%, 110.9%
Papakura, $702,318, 1.5%, 2.3%, 95.2%
Franklin, $674,114, $2.2%, 1.6%, 70.4%

Northern border, down country & national:
Whangarei, $510,409, 2.1%, 9.1%, 28.8%
Kaipara, $507,906, 3.2%, 7.9%, 28.0%
Hamilton, $548,417, $0.8%, 3.1%, 51.7%
Tauranga, $706,825, 2.8%, 4.9%, 46.8%
Wellington, $764,020, 1.9%, 7.6%, 43.5%
Christchurch, $494,563, 0.1%, -0.8%, 30.4%
Queenstown Lakes, $1,114,358, 0.8%,7.2%, 62.0%
All New Zealand, $672,645, 1.2%, 6.5%, 62.3%

Attribution: QV tables & release.

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Inflation adjustment turns Auckland house price rise into a fall

Quotable Value Ltd’s rolling 3-monthly calculation of its house price index shows Auckland values picked up more in January. Nationally, the picture was mixed.

For the Auckland region, the index rose 1.2% in the 3 months to December and 1.6% in the 3 months to January, but only 0.7% over the 12 months to January.

QV’s Auckland property consultant, William Liew, said: “January, as is often the case, was relatively quiet due to the holiday period. The signs do suggest that the heat has been taken out of the market and buyers are showing less urgency.

“We have also seen the ongoing impacts of the loan:value ratio (LVR) restrictions, changes of lending criteria and uncertainly with the change of government, which have contributed to a cooling in the Auckland market.”

QV general manager David Nagel said: “January has seen values continue to rise in many places around New Zealand, but values have dropped in others, and in general activity has been slower in many places over the holiday season.”

Adjusted for inflation, the Auckland rise of 0.7% over 12 months turns into a 0.9% fall, and the national rise of 6.4% is reduced to 4.7%.

Below, the dollar figure is the average value for January. The first percentage is for the 3 months to January, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:

Auckland region, $1,054,574, 1.6%, 0.7%, 93.0%
Rodney, $947,856, 1.5%, 1.5%, 61.6%
North, $969,140, 1.5%, 0.8%, 61.3%
Hibiscus Coast, $927,897, 1.5%, 2.1%, 58.0%
North Shore, $1,228,920, 2.3%, 1.2%, 90.4%
Coastal, $1,410,765, 3.5%, 1.7%, 87.2%
Onewa, $977,381, -0.4%, 0.6%, 97.0%
North Harbour, $1,199,720, 2.6%, 0.8%, 97.4%
Waitakere, $822,871, 0.5%, -1.6%, 94.1%
Auckland City, $1,245,682, 1.8%, 1.7%, 100.1%
Central, $1,078,359, -0.1%, 1.2%, 89.3%
East, $1,576,640, 2.7%, 2.9%, 97.8%
South, $1,104,859, 1.3%, -0.3%, 105.2%
Islands, $1,166,941, 4.7%, 12.6%, 82.5%
Manukau, $904,158, 1.2%, 0.3%, 97.5%
East, $1,161,381, 0.9%, 0.3%, 94.9%
Central, $703,189, 1.9%, 2.4%, 87.1%
North-west, $776,208, 1.6%, -0.6%, 110.1%
Papakura, $700,283, 2.3%, 2.4%, 94.7%
Franklin, $673,514, 1.2%, 2.0%, 70.3%

Northern border, down country & national:

Whangarei, $509,857, 2.9%, 10.0%, 28.7%
Kaipara, $506,745, 0.3%, 9.2%, 27.7%
Hamilton, $544,935, 0.3%, 2.6%, 50.7%
Tauranga, $698,875, 1.7%, 3.9%, 45.2%
Wellington, $764,560, 3.5%, 8.9%, 43.60%
Christchurch, $494,459, 0.8%, -0.6%, 30.3%
Queenstown Lakes, $1,116,673, 2.2%, 8.1%, 62.4%
All New Zealand, $671,531, 3.8%, 6.4%, 62.1%

Link: Full QV house price index January 2018

Attribution: QV tables & release.

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QV says rise in average Auckland home value just $4583 for year

The average residential property value rose by 6.6% ($41,660) nationally last year, according to Quotable Value Ltd’s index.

In Auckland, the rise was just $4583 (0.4%) for the year.

In a few places the movement over the year was downward, including a 0.1% fall in Christchurch.

QV recaps

QV national spokesperson Andrea Rush said the general trend was for slowing in the rate of growth due to loan:value ratio (LVR) speed limits, stricter retail bank lending criteria & uncertainty ahead of the election, but in some areas values rose rapidly while decreasing in others.

Ms Rush said sales volumes fell every month from the 2016 figures. From February-October the drop in sales exceeded 20%/month, before picking up in November, when a post-election late spring surge saw them jump to just 10% lower than November 2016 levels.

“A slowdown in the rate of value growth in the housing market that began in the latter part of 2016 with the introduction of LVR speed limits, requiring a 40% deposit by investors, continued throughout 2017.

“The frenzy in the market of the previous 3 years, induced by high numbers of investors in the market, subsided and we saw a return to more normal levels of activity in housing markets around the country.

“By October, nationwide annual value growth had slowed to 3.9%, the lowest rate of growth seen in 5 years, and for the Auckland region it slowed to -0.6%, the slowest annual rate of growth seen there since Mach 2011.

“High prices, constraints on finance caused by tightening in retail banks lending criteria and higher deposit requirements removed many buyers from the market and sales volumes plummeted.

“Potential housing policy changes in the lead-up to the election also caused uncertainty and people took a wait-&-see approach, causing activity to slow dramatically over the winter quarter, and this resulted in value decreases in many areas.

“The usual annual spring surge was very slow to arrive and listing levels and market activity did not pick up until November and December and this can be seen in both sales volumes and value growth recovering in the last two months of the year.

“The annual rate of value growth recovered to 6.4% in November & 6.6% in December, and sales volumes for November lifted 21.0% higher than in October. This was partly due to buyers delaying purchasing until the election result was decided, and may also have been in part due to some buyers racing to purchase before the new foreign buyers’ ban in December.

“The slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity & demand in the market as we move through the summer months.

“Low interest rates, relatively high net migration & lack of supply means market drivers remain, and we are likely to see values hold for the most part during 2018 in the main centres, but the trend of lower rates of growth is likely to continue.

“However, areas where investors were previously very active may continue to see values drop back where prices remain too high for first-homebuyers, particularly in Auckland, Hamilton & surrounding districts.

“Some regional areas may continue to see stronger value growth than the main centres during the year.”

Below, the dollar figure is the average value for December. The first percentage is for the 3 months to December, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries:

Auckland region, $1,051,762, 1.2%, 0.4%, 92.5%
Rodney, $941,029, 0.1%, 1.3%, 60.4%
North, $961,471, 1.6%, 0.4%, 60.1%
Hibiscus Coast, $921,890, -1.7%, 2.0%, 57.0%
North Shore, $1,226,509, 2.6%, 0.7%, 90.1%
Coastal, $1,405,509, 3.1%, 0.7%, 86.5%
Onewa, $981,844, 2.1%, 0.6%, 97.9%
North Harbour, $1,192,164, 2.1%, 0.6%, 96.2%
Waitakere, $824,271, 1.0%, -1.9%, 94.4%
Auckland City, $1,245,536, 1.6%, 2.2%, 100.1%
Central, $1,085,314, 0.6%, 2.2%, 90.6%
East, $1,575,133, 2.8%, 3.6%, 97.7%
South, $1,100,710, 0.1%, -0.4%, 104.5%
Islands (low volume), $1,161,110, 6.6%, 13.7%, 81.6%
Manukau, $895,606, -0.3%, -1.0%, 95.7%
East, $1,150,996, -0.7%, -0.9%, 93.1%
Central, $695,724, 1.1%, 1.1%, 85.1%
North-west, $769,615, -0.3%, -1.5%, 108.3%
Papakura, $696,713, 2.6%, 2.2%, 93.7%
Franklin, $666,676, 0.5%, 1.0%, 68.5%

Northern border, down country & national:

Far North, $421,582, 3.0%, 11.8%, 5.9%
Kaipara (low volume), $496,551, -3.7%, 6.2%, 25.2%
Hamilton, $543,446, -0.5%, 1.6%, 50.3%
Tauranga, $693,725, 1.0%, 3.2%, 44.1%
Gisborne, $293,346, -0.6%, 8.9%, -1.3%
Wellington region, $628,450, 3.6%, 9.4%, 37.9%
Christchurch, $493,706, 0.4%, -0.1%, 30.1%
Dunedin, $391,098, 2.7%, 10.4%, 36.6%
Queenstown-Lakes, $1,111,995, 3.0%, 8.8%, 61.7%
Total NZ, $669,565, 3.6%, 6.6%, 61.6%

Link to full index: QV house price index for December 2017

Attribution: QV tables & release.

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