Residential property prices in New Zealand increased in June with the real estate market in Auckland driving the growth, according to the latest QV index.
It is the first increase in values for several months and means that the gap in values between June this year and last year has closed to only -0.9% and values are now 5.2% below the market peak of late 2007.
‘Much of the gain in nationwide values can be attributed to increases in the Auckland area. Apart from a minor hiccup in March values have increased by over 2% in greater Auckland since January,’ said QV research director, Jonno Ingerson.
The index shows that across the wider Auckland area values are now 1.4% above last year and only 1% below the previous market peak of late 2007. There is variability with the Manukau area being more or less stable over the past three months, while North Shore and Waitakere have increased modestly. In what used to be called Auckland City increases since January mean that values are now at their highest level ever, currently sitting 0.7% above the previous market peak.
‘These gains in Auckland City are due to a range of factors including the lack of quality properties for sale, strong demand for established character locations and good school zones, and the perception that purchasing in central Auckland is a safe investment,’ explained Ingerson.
However, the index also shows that values in Hamilton and Tauranga have leveled off in recent months, with Hamilton now 3.6% down on last year and Tauranga 1.8% down. In Wellington, the only main centre where values have continued to decline in recent months, they have fallen over 1% since January and are 3.3% below the same time last year.
There are no figures for Christchurch because the impact of the recent earthquakes meant that there are very few sales making it impossible for valid data to be produced, Ingerson said.
‘The recent CERA announcements of red and green zones helps give some certainty to some people in Christchurch, enabling them to evaluate their options and make property decisions. This will likely to lead to a further increase in demand for vacant sections and houses in the undamaged parts of Christchurch and surrounding areas,’ he explained.
‘Properties in undamaged parts of Christchurch tend to be selling for around their pre-earthquake values, with little sign that prices are either significantly up or down,’ he added.
In Dunedin values have been a little variable since the New Year, but have been generally flat. Due to the monthly variability both this year and last year the annual change in values is also varying from month to month, but values are currently 3.5% below last year, the index shows.
Values in many provincial centers have increased over the last month, leading to a closing of the gap between this year and last year. Whangarei, down 4.1%, Gisborne down 3.1%, New Plymouth down 3.3%, Wanganui down 4% and Palmerston North down 2.8% remain the furthest below last year. While Napier is down 2.1%, Hastings down 1.4%, Rotorua and Nelson both down 0.2% and Queenstown Lakes down 0.1% are more or less stable.