Nationwide residential property values eased slightly in March according to the latest QV index. Despite the slight drop in the last month, values are still up 0.5% over the past three months and 3.0% up over the past year. Values are now 3.0% below the previous market peak of late 2007.
QV.co.nz Research Director, Jonno Ingerson said "the marginal drop in values last month follows a year of slight month on month increases. These increases were driven initially by Auckland and Canterbury but the rest of the main centres have also been increasing over the past few months. It is too early to say if the drop in the latest month represents a change in direction for the market".
Ingerson said "sales activity remained strong in March, returning to the highest levels since 2009. Activity levels have been bolstered by first home buyers having enough confidence to enter the market, while some existing home owners are now ready to make a move they may have been delaying for several years. The level of sales activity is still being constrained by a lack of supply in some areas, particularly Auckland, Christchurch and parts of Wellington."
"The market remains variable across the country, responding to local economic influences. Most of the main centres have been increasing, most of the provincial centres have been more or less stable, and the rural centres have generally been increasing over the past year" Ingerson said.
Values in the wider Auckland area are up 0.8% over the past quarter, and 5.0% up over the past year. This annual increase is more than any of the other main centres and as a result values are now 2.2% above the previous market peak.
In the most recent month values have either steadied or dropped slightly in Rodney, North Shore, old Auckland City, and Manukau, and as a result the wider Auckland area has eased slightly. It is too soon to say if this is the beginning of a changing trend in the market or just a temporary dip.
The old Auckland City remains the fastest growing part of the Auckland Area, up 6.9% over the year and now 4.8% above the 2007 market peak. The Southern part of the old Auckland City within the area from Mt Eden to Waterview to Blockhouse Bay to Penrose has risen 8.8% over the past year and is now 6.1% above the previous market peak.
"Quality properties in good school zones and near the city centre remain in high demand. However there are insufficient properties coming onto the market to meet this demand which is tending to put upward pressure on prices" said QV Valuer Glenda Whitehead.
"In central areas, where zoning will allow, we are starting to�see�infill housing sites being created, with seemingly good demand for these vacant sections either from spec builders or potential owner/occupiers" said Whitehead.
Across the rest of Auckland values are up 4.4% over the past year in Papakura, 4.2% in Waitakere, 3.8% in North Shore and 3.1% in Manukau. All these areas have risen more in the past year than any of the other main centres apart from Christchurch which has risen 4.1%.
Values in Hamilton have been steady for the past five months, but increases in the months prior to that mean that values are currently 1.2% up over the past year and 11.0% below the previous market peak.
"Anecdotal evidence indicates there has been renewed interest in residential property in Hamilton over the last couple of months. Homes in the middle to upper end of the market appear to be selling best with less demand for homes in the bottom end of the market" said QV Valuer Richard Allen.
Tauranga values have been relatively steady for the past six months, and are 1.3% above the same time last year and 11.1% below the 2007 market peak.
"There are some signs appearing in the Tauranga market that a trickle down affect is occurring from the growing Auckland market. Some buyers are starting to perceive they are getting more relative value in comparison. At this stage the market remains generally steady" said QV Valuer Shayne Donovan-Grammer.
Over the past twelve months values first dropped for six months, then rose for the next six months to currently sit 0.1% above the same time last year. Values are currently 5.9% below the previous market peak.
QV Valuer Kerry Buckeridge said "activity in the market place is anything but static at the moment. Real estate agents continue to report being very busy since the beginning of the year as people returned from holiday with a "let's get on with it" attitude. However despite a flurry of listings early in the year there are now emerging signs of a stock shortage in some areas. There remain good levels of activity in the first home buyer market, while higher end properties with the "X factor" have been achieving multiple offers at tender".
Values in Christchurch have risen 1.1% over the past three months and 4.1% over the past twelve months. Christchurch values are now 0.2% above the 2007 market peak.
The areas neighbouring Christchurch are increasing in value faster than anywhere else in the country. Waimakariri District has increased 13.3% over the past year and Selwyn District 10.4%. Both areas are also the most above the previous market peak with Waimakariri 7.9% higher and Selwyn 6.8% higher.
"Demand in towns surrounding Christchurch continues to be high, especially as more contractors and their families start moving into the area to help with the rebuild. Whilst many seem to welcome the opportunity to work in the region, some are worried about another earthquake and want to live away from previously damaged areas. There are reports of some workers who are commuting daily from as far away as Ashburton" said QV Valuer Richard Kolff.
"Feedback from agents also suggests that many people are only selling when they have to, such as if they are a growing family and need more room. This is resulting in low levels of listings and is in turn pushing up prices" said Kolff.
Up until a couple of months ago Dunedin values had been amongst the fastest increasing in the country. Values have dropped slightly in the last two months but are still up 0.2% over the past three months and 2.6% up over the past year.
"Sales in the lower end of the market are occurring quite quickly with multiple offers evident. This is in contrast to the higher end properties where buyers are remaining hesitant" said QV Valuer Tim Gibson.
Over the past three months values have increased between 1% and 2% in Rotorua, Palmerston North and Invercargill. Gisborne has dropped 1% with the other main provincial centres staying more or less steady.
Over the past year Whangarei has increased 3.1%, Nelson 1.8% and Palmerston North 1.1%. Wanganui is down 4.3% over the year, Gisborne down 2.0%, Napier down 1.7%, Hasting down 1.3% and Queenstown Lakes down 1.1%. Values in Rotorua, New Plymouth and Invercargill are within 1% of last year.
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