Quotable Value Ltd’s Auckland house price index continued its relentless climb in May – 91% above the 2007 peak in north-west Manukau (airport territory), and the lowest rise over those 8½ years 42.8% on the Hibiscus Coast.
Or you can cross the northern border into the Kaipara for a 1.3% gain from 2007 until April, rising to 3.6% in May. Or head south-east to Thames Coromandel, where the index is 1.9% below where it was in 2007.
A selection of quotes from Auckland valuer James Wilson in today’s QV report on the monthly index shifts:
“Values are rising rapidly across the city again.…. transacting within short timeframes by property speculators…. Vacant sections within new developments are extremely popular… a growing number of homes are underinsured…. Agents are reporting a shortage of listings… offers are made & accepted without the property reaching the wider market.”
The Auckland index has increased 3.3% in 3 months, 15.4% in a year, the region 74.9% since the start of the global financial crisis at the end of 2007. Adjusted for inflation, the rises are 14.9% over 12 months, 49.1% since 2007. The average value in the Auckland region is now $955,793, compared to a national average of $577,829.
The national picture
The national index shows a 3.9% gain over 3 months, 12.4% gain in a year, 39.5% since 2007. Adjusted for inflation, the 12-month gain was 11.9%, 18.9% since 2007.
QV national spokesperson Andrea Rush said: “Residential property values are rising rapidly across Auckland again and they also continue to accelerate in many other parts of the country, with much of the activity driven by strong demand from investors.
“Tauranga, Hamilton, Wellington, Dunedin & Queenstown values continue to see particularly strong growth, as do many other regional centres & smaller towns located within commuting distance of these main centres.
“The Christchurch market, by comparison, is slow & steady, with normal levels of activity & sales volumes but little value growth as supply is now meeting demand for housing in the city.
“Migration is continuing at the highest levels seen in 100 years and this population growth, coupled with growing demand from investors, means housing supply, particularly in Auckland & Queenstown, is not able to keep up with demand and this is driving values ever higher.
“While it is clear Auckland needs more housing, both within the existing urban metropolitan boundary and on future urban-zoned land, as well as new infrastructure to service it, it appears to be investor demand that’s driving the rapid value growth in Auckland and other parts of the country.”
Auckland valuer picks the issues
QV homevalue registered valuer James Wilson said: “Throughout May we have seen a continuation of the buoyant market conditions experienced during April and values are rising rapidly across the city again.
“We are also seeing numerous examples of properties transacting within short timeframes by property speculators.
“Vacant sections within new developments are extremely popular, with the onselling of vacant sites which have been purchased off plans providing strong capital gains.”
What Mr Wilson didn’t mention was that foreign investors, with tax & company registration in order, are able to make a 10% deposit of under $100,000 on a new subdivision section for potentially large capital gain on the completed off-plans house. Subdivisions have been selling out in weeks to these buyers.
Mr Wilson said there was ongoing concern about the lack of awareness among homeowners following changes to home replacement insurance “and we believe a growing number of homes are underinsured.”
QV homevalue Hamilton valuer Stephen Hare said: “The Hamilton market is still seeing strong demand from out-of-town investors and the supply of properties on the market is still not able to keep up with buyer demand.
“We are seeing particularly strong demand for properties in the lower value price bracket between $4-600,000. There’s also a growing trend of first-homebuyers priced out of the market, purchasing more affordable homes in smaller townships within commuting distance of Hamilton.”
“A typical example of this is what we are seeing in the Waikato district town of Ngaruawahia, which is a 15-minute drive north from Hamilton and about an hour and a half drive south of Auckland.
“Growing numbers of Hamilton first-homebuyers are buying in Ngaruawahia, which is also popular with out-of-town investors, and this is resulting in rapidly rising values in the town.
“The rise in demand for housing stock in the town has also now led to a shortage of rental properties, which is driving rents up.”
Some regional & national figures, around Auckland on the old council boundaries, and what’s happening at the neighbours – the latest average value and index shifts in the last 3 months, last 12 months & since the 2007 peak:
Auckland region, $955,793, 3.3%, 15.4%, 74.9%
Wellington region, $504,794, 4.0%, 10.2%, 10.8%
Main urban areas, $688,908, 3.8%, 12.8%, 50.0%
Total NZ, $577,829, 3.9%, 12.4%, 39.5%
Kaipara, $410,918, 9.3%, 19.8%, 3.6%
Rodney, $849,107, 2.9%, 17.6%, 44.8%
North, $860,503, 2.1%, 17.8%, 43.3%
Hibiscus Coast, $838,942, 3.6%, 17.4%, 42.8%
North Shore, $1,110,891, 3.2%, 14.1%, 72.2%
Coastal, $1,268,592, 3.8%, 14.0%, 68.4%
Onewa, $887,738, 2.3%, 12.5%, 79.0%
North Harbour, $1,089,841, 3.1%, 16.7%, 79.4%
Waitakere, $765,019, 4.6%, 16.5%, 80.4%
Auckland City, $1,121,337, 3.0%, 13.0%, 80.1%
Central, $982,427, 3.2%, 14.8%, 72.5%
East, $1,400,219, 3.1%, 12.8%, 75.7%
South, $1,012,577, 2.6%, 12.4%, 88.1%
Islands, $933,331, 4.9%, 11.8%, 46.0%
Manukau, $824,407, 4.4%, 19.6%, 80.1%
East, $1,054,687, 4.1%, 16.5%, 77.0%
Central, $643,369, 4.8%, 22.7%, 71.1%
North-west, $706,122, 4.5%, 22.4%, 91.1%
Papakura, $611,026, 1.1%, 20.7%, 69.8%
Franklin, $599,937, 2.4%, 17.1%, 51.7%
Thames Coromandel, $570,381, 2.5%, 9.3%, -1.9%
Hauraki, $305,046, 9.5%, 19.0%, 9.3%
Waikato, $378,903, 5.8%, 27.0%, 25.2%
Matamata Piako, $335,784, 5.8%, 18.2%, 15.1%
Hamilton, $478,323, 4.9%, 26.2%, 32.3%
Attribution: QV release.