NZ house values ease but QV says lower value properties selling faster

National residential property values fell 0.7 percent in the three months through July .Photo: John Sefton

New Zealand house values eased in the past three months as lower value, more affordable properties sold at a faster rate, due to continued demand from first home buyers, according to Quotable Value.

National residential property values fell 0.7 percent in the three months through July and the nationwide average now sits at $673,797, QV said. The annual increase was 5.1 percent in July or 3.5 percent adjusted for inflation, QV said.

In the Auckland region property values fell 0.1 percent to an average $1.05 million in the past quarter, although they are up 0.6 percent year-on-year, QV said.

"We’re seeing a shift in the market across many regions, with most of the market activity and value growth taking place at the ‘lower-end’ of the market where values are more affordable,"
said QV general manager David Nagel.

He did add, however, there has been a drop in activity in some areas over the past few months and "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. We’ll be closely monitoring the impact of the government’s initiative over the coming months although its full impact won’t be felt for some time yet."

Hamilton City home values rose 0.8 percent over the past three months and values increased 3.3 percent year-on-year. The average value in Hamilton is now $558,615.

“Entry-level property, below approximately $500,000, continues to attract plenty of demand from first home buyers," said QV Hamilton property consultant Andrew Jaques.

Tauranga home values rose 1.7 percent year-on-year although they dropped 0.2 percent over the past three months. The average value in the city is $702,850.

Values across the whole Wellington Region rose 7.4 percent year-on-year in July and increased 1.5 percent over the past quarter. The average value is now $651,725.

“The lower-to-mid section of the market - those properties valued under $750,000 - have experienced the greatest value growth over the last 12 months. This is a result of strong activity from first home buyers, who are snapping up relatively affordable properties in Wellington’s outer areas such as Lower Hutt, Upper Hutt and Porirua," said QV Wellington senior consultant David Cornford.

“There has been a noticeable drop in value growth at the upper end of the market– those priced above $1,000,000 – as affordability challenges effectively put the brakes on.”

In the South Island, values in Dunedin lifted 10 percent year-on-year and 1.8 percent over the past three months. The average value in the city is $411,669.

"Investor activity remains relatively high and it continues to grow which is different to most areas in New Zealand which is experiencing a drop in investor activity. We believe this is due to relatively low values and some great lifestyle properties on offer near the CBD or the beach," said QV Dunedin property consultant Tim Gibson.