Average dwelling values are continuing to rise and the national average value hit a new high of $568,058 in April according to Quotable Value (QV).
That was up 12% compared to April last year.
Average values are also continuing to rise in Auckland, where a housing shortage has put property prices under huge upward pressure over the last few years.
The average value of Auckland homes hit $942,760 in April, up $11,699, or 1.3%, from $931,061 in March.
Average dwelling values across the Auckland region are now 16.5% higher than they were a year ago.
Within the region, the biggest increases in values have occurred in south Auckland, with the biggest gain occurring in Papakura where April's average value of $608,610 was up 24.4% compared to a year ago.
Values were also up strongly in Manukau Central and Northwest where average values have risen by 24% over the last year.
The cheapest place to live in Auckland is Franklin where the average value is $594,022 and the most expensive is coastal North Shore, where the average value is $1,253,449.
Dwelling values in Hamilton are also experiencing explosive growth, with April's average value of $471,072 up 25.3% compared to a year earlier, while in Tauranga the average dwelling's value of $577,494 was up 21.5% compared to a year earlier.
Other areas with double digit growth in values over the last year were parts of Wellington, Kaikoura up 12.5%, MacKenzie up 11% Dunedin south up 10.9% and Queenstown Lakes up 17.8%.
"All the main centres around New Zealand and many regional centres have seen home values increase during April, with the promise of continued record low interest rates providing confidence in the housing sector," QV national spokesperson Andrea Rush said.
Click on the following link to see QV's average values for all parts of the country.
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104 Comments
So according to the supply-side economics disciples on this site, the logical explanation for this is that there have been 25% year-on-year population increases in Hamilton and Tauranga, right? Either that or 25% of the existing home stock has been demolished in the past year. Must be one of those two things. Certainly couldn't be investor-driven speculation. What a ridiculous suggestion.
Yes I do know.......and you can install a $9000 flat pack kitchen (materials cost) .....$3000 to $4000 labour includes subbies......and add between $25,000 to $50,000 value to a house.
I know places where there has been $200k (labour and materials) spent on a make-over that added over double that in value.
Income taxes generally only get paid on the tradies profit not the increased added value unless a buyer is perhaps trading in houses for their business profit.....so I am very serious that tradies need to up their prices which will add to the tax base.....and close the gap between the wholesale and retail prices that has opened up over the last few years.
Do you know how much equipment and tools are needed by a builder it costs thousands and they charge out at between $50 to $65 per hour(some may be a bit higher) compare that to say someone who is in IT who charges $150 per hour with only the cost of a computer.....now look at lawyers, Drs, Accountants etc and their charge out rates and tool costs.....believe me people are being overpaid for sitting on their butts.....so the highly paid butt sitters have too much money and they then invest in industries that have lower paid people producing things like housing.........now those butt sitters neither have the aptitude nor the physical attitude requirements to undertake an activity that requires a measure of hard graft......so instead of doing hard graft they are investing in other people's ability to do hard graft and the housing market has been very good at delivering that investment product for them.......would these same people want to invest in housing if the returns weren't there for them?
A builder is the lowest paid of all the tradies but has the highest amount invested in tools and also wears all the problems when something goes wrong with method and or materials and yet they currently significantly undercharge which has placed the product they produce into the wholesale category.
Jerry-NZ - My comments had nothing to do with people's choice of profession....my comments are in relation to what is likely to be mis-pricing in the market.
It is quite common for many qualified builder employees to be earning $35.00 per hour.....some labour only sub-contractor builders can be getting as low as $40 per hour and have to wear all the usual costs of running a business without the ability to make a profit off materials......the head contractor might be charging them out at $50 or more per hour.
Down my street 4 new houses being built 3 new vehicles all the rest are older style vehicles. A couple of Surfs, 3 station wagon cars, a couple of older model 2 wheel drive double cab utes and one older model prado.....so not everyone is driving around in a new truck......
You may not realise it but all these housing companies contract the builders so builders and other tradies are mainly wholesalers of labour in the market.....builders that don't do the housing company works still have to compete on price with other local builders.
Qualified builders many who are LBP's have priced their labour too cheap......
"wears all the problems when something goes wrong with method and or materials"
Given they are the person with the method, and the one buying the materials they should be wearing it. But lets face it, the first sign of trouble and they declare bankruptcy then start up a new sham Ltd company to fleece the next person.
That is quite a statement Noncents!.....Method and materials are dictated by the building code, architects and engineers, and Councils.....and then there is also BRANZ!! Then there are project managers and housing companies......
You make it sound like builders all do shonky work using a sham company to rip people off.......what a load of nonsense that is.....most builders I know take much pride in their workmanship......and there are many out there who have been around a very long time.......I do wonder how many people out there who do building work, but are not qualified as builders or even hold an LBP and then the whole industry gets blamed for their actions when something goes wrong..........it is better to catch out the unqualified ones who are often moonlighting than to accuse all people within the industry!
Not all, but a lot. Having seen the Leaky Buildings, general Auckland inspections, and Chch rebuild, MAsterbuild claims etc... The majority of builders definitely aren't taking pride in their work - or if they are they shouldn't be. Average quality of NZ workmanship is pretty poor in my experience.
There are of course some very good builders out there. Are they the majority? - no.
There is some poor finishing workmanship in the slap up housing company homes where builders have tight time-frame contracts....the finishing materials used are also not of a high quality.......good or bad workmanship can be down to something like a 3 hour job had to be done in 1 hour......they are called slap up buildings within the industry for a reason.......and maybe this is your average house in NZ.
You have to remember that those leaky buildings were built using approved materials and were signed off as being OK by the Councils.....if a builder undertook the work the way the regulatory system indicated it had to be done then is it a builders shoddy work or regulators shoddy work?......it has just been easier for the regulators to point their finger at the builders as they have a direct mouthpiece with the media.
People who want quality, like any quality of any product know they have to pay for it.......and the building industry is no different......remember the standards enforced are the minimum requirements...........the regulations are strict on structural issues but finishing works will have a variation of standard depending on beer budget or champagne budget. Most of the shoddy works I have seen around have been undertaken by people who have shot through already or by people have turned into property investors so undertake much of the repair work themselves.
Should have added, you may be right about material and method being dictated by the building code etc... but are they followed? It is the builder actually doing the work.
Project managers definitely deserve more heat as well. But hey NZ isn't big on justice for bad jobs/work.
There's a huge gap in technical knowledge relating to products. It doesn't help that MBIE screwed up and banned certain building products like timber weatherboards. If those who set the rules don't even understand them how are the builders supposed to know what to do. If the project lacks knowledgeable engineers or technicians the builders often have no one to turn to.
That and there are many useless commodity products on the market that are not tested and have no evidence of their performance. Sometimes the right questions to ask are only known by engineers which makes things difficult.
Good grief dictator what on earth are you talking about? Weatherboards banned?
No LBP (and one must be on site for all work requiring a tick from Council) can work outside of their skill level if works require something which they have not undertaken before then they must do this work with someone who has!
Builders must use products for the purpose they were intended. If they don't they will find warranties and guarantees invalid.
A product is either BRANZ approved or comes under the alternative solutions.
What products are you talking about in your last paragraph? And where are they being used in a building?
NZBC C/AS1 5.4 and Table 5.1 peak heat release rate within 1 m of a relevant boundary 100 kW/m2 and 1 m or more 150 kW/m2. Both of those rates if you pull up the correct BRANZ paper show that only non-combustible surface finishes comply with these limits. That excludes timber products.
C/AS1 is what applies to most residential buildings, detached dwellings and so on.
That's just one example. There's a lot of comedy in the New Zealand Building Code, some of it works but some of it doesn't make any practical or engineering sense.
The building code is performance based and a lot of the commodity products in stores are probably fine for residential construction but as soon as it's commercial there's no performance tests for a lot of commodities which excludes them from commercial use. People moan about monopolies on construction materials but there are a lot of suppliers that won't pay for testing to sell the products.
You are talking about the FRR (Fire Resistance Ratings) and someone who is a builder would be far better to comment than myself but I'd assume most of them are far too busy to be hanging around this site reading. But yes the there is a 1m from boundary rule that applies and there are other rules too see links below....you implied that weatherboards had been banned within the industry when they haven't. There are plenty of PDF files available to download if you google search the topic.
http://www.weathertight.org.nz/new-buildings/detail-solutions/wall-clad…
http://www.buildmagazine.org.nz/articles/show/external-fire-spread-on-h…
It can cost in excess of $100k to get a product BRANZ approved so I can see why suppliers don't get their products tested especially when their products have been tested and approved in other countries.
You might want to consider carefully what you have said there because if any exterior walls on a house have been clad in timber products with a building consent issued from April 2013 it does not comply with the Acceptable Solutions. That would suggest a lot of LBP builders are operating outside of their capability by your definition.
Any house getting a cladding system has to have a building consents and pre-cladding inspection the cladding type is well known to the consents authorities before being fitted....
You are twisting in and out of hoops here using small pieces of information that don't mix with the other small pieces. You have completely misconstrued what I have said and then made the rest of your story fit.
More of X and y need to vote and so things will not change until they do. X and the Boomers are being listened to as they hold the bulk of residential investments and family homes. If they are happy they will keep voting for JK and Co. They are the ones buying the news cars and investing in homes out of Auckland which are rising in value fast so they are feeling good. Soon they will be off to Europe and the States as they are feeling great that their worth is increasing. Coupled with Labour(unfortunately) have not cleaned out their dead wood such as Mallard and have a robot as leader not being a very effective opposition party I cannot see things changing politically easily in NZ.
Exactly. If the young people can't be bothered voting their interests will not be looked after to the same extent as they would if they formed an important voting block. I read something the other day on this exact subject. They need to get engaged with "so yesterday" democracy as collectively they will have a voice. Who knows they may even have something good to say on other relevant issues like immigration, water sales and pollution of our land.
Someone has to represent their interests first.
Labour go after the under 25s (Students), National go for the 50+ (Boomers), Greens, Maori, United are definitely not Gen X. So who does that leave?
NZ First and Winston - who co-incidentally are rising in the polls.
Tauranga prices are now 15% above the last 2007 peak.... in inflation adjusted terms, prices are probably lower.Not sure that you would be happy buying in 2007 and having made nothing by 2016.
Slightly off topic, found this quote from the 2007 herald story...
Agent George Lancaster, of Harcourts Mt Eden, said from his 15 years' experience selling in Mt Eden "the Asian influence is huge", especially when it came to purchasing large sections. "There needs to be some form of lease arrangement or tax to buy New Zealand property, otherwise it's all going to fall out of New Zealand ownership," he said.
Olly Newland predicted this very knock–on effect in his excellent article of May 13, last year when referring to distortions the Reserve Bank regulations would bring:
"There will be unintended consequences which will play right into the hands of investors to the detriment of the ordinary first home home buyer and to the renters".
"The biggest effect will be to push investors into the provinces where prices are much more reasonable. If you are living in Hamilton, Huntly, Mercer, Cambridge , Tauranga, Thames and all the other areas North and South of Auckland City you might be either getting very nervous or gearing up for a bonanza. The good Governor has even raised the amount allowed by banks for lending in these in these areas from 10% to to 15% so look around and take note. There could well be a wave of investors heading out of Auckland to a place near you".
link:
http://www.interest.co.nz/opinion/75466/property-investor-olly-newland-…
Yes and the other main factor for AKL starting to flat line is that the majority of Auckland Mom and Pop investors are no longer investing in Auckland, they prefer to hold on to their home and use any capital they have and equity available, to invested in more affordable areas like Hamilton and Tauranga.
Even those who are renting in Auckland are not foolish enough to buy in the massively over inflated Auckland market, instead if they can afford too. They are using other investment strategies to purchase a home. Such as using a technique called 'Mouse holing' where you buy a property in a more affordable and up and coming area, rent it out and wait for it to increase in value to allow you to settle in that area later in life or sell up and move on with gained capital investment.
So it's not surprising that people are holding on to their properties if they can, if they can use the equity to help their children purchase their first home else where.
The only ones that are able and to buy in this crazy AKL market are Non-Residents and very wealthy new immigrants.
So prices up 1.5% in Auckland in the past 3 months? Much lower than last years rises in that time period from what I remember. Lets hope it slows to around 4% to 5% annually which may be slightly more sustainable and realistic growth than the craziness we saw last year. Hopefully it will even plateau at some stage for at least a few years.
A 4% - 5% rise for a median Auckland house is still 40% to 50% of typical annual household income. Paid back via a 25 year mortgage with interest and it is close to one year's income(?). Is that really sustainable/realistic growth? I can't see how unless it isn't local typical households that are buying...
As many have said both immigration and foreign investors are a significant factor. The false bogeyman (straw man) of Xenophobia is frequently raised as a counter argument. As I said a year or two ago if these forces remain unchecked immigrant families will suffer from the inevitable backlash. The following bears testimony to this.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11632998 Brave young lass, good on her for speaking up.
It is very sad for these folks as they also suffer from the ridiculously high prices like any other Kiwi. This backlash is only going to get worse and will severely damage our foreign and trading relationships unless something is done to address the problem.
She's dead right, and it's a real worry. When the tensions and frustration build up, it isn't absentee landlords and foreign money launderers who'll be taking the brunt of abuse, violence, vandalism and destruction of property. It'll be the innocent people who are doing nothing wrong, and just getting on with their lives running a takeaway or something.
she is echoing what many around her age are saying, they are now a lost cause for home ownership in NZ unless parents help or they are among the lucky or talented who earn great remuneration
we are condemning young middle class and below NZ to leave the country to try to fulfil the NZ dream of home ownership and family or stay and rent.
I know many below thirty that are heading to queensland because it is still achievable
I think all we are doing is encouraging, the young, best and brightest to leave New Zealand. The irrefutable logic is used that one day they will return - some how I doubt it. If I had my life over I would do things differently - one is I would leave for Australia or further a field and never come back. I think New Zealand and the world should act in the interests of the inhabitants of this planet as a whole rather than self-interest of individuals. The world witnessed the destruction of the Soviet Union twenty something years ago - are we now witnessing the destruction of capitalism. The human race can't destroy the planet but the can destroy man's ability to inhabit this planet.
@ Kakapo; Yes I really feel sorry for current and future tenants, especially the ones in Auckland who are quite likely to have absentee Landlords. Since they're unable to keep an eye on their properties. Having been in this situation myself, I can tell you it's an absolute nightmare trying to manage a property when you're in another country, even with using a Letting Agent to provide a fully managed service.
The properties simply start to fall in to disrepair after a few years, and it I'm sure it's even worse here considering that there's not much in the way of Landlord minimum standards required for letting a home, for even basic things like providing adequate heating in their properties. This requirement doesn't seem to be enforced, which I find shocking.
I live in Tauranga, and have been asked repeatedly by Aucklanders about the opportunity in Tauranga in the last year, as they see Here's the thing - there's plenty of land ready to develop, and it'll happen, but Aucklanders expect the same pattern of undersupply as occurred in Auckland - but what's going to happen is they will all buy, prices will peak, rents will fall and tenants will be poor quality, and then new house supply will come on stream , and prices will fall and stay down for five years. Just like 1991, 1999, 2008.
I live in Tauranga, and have been asked repeatedly by Aucklanders about the opportunity in Tauranga in the last year, as they see Here's the thing - there's plenty of land ready to develop, and it'll happen, but Aucklanders expect the same pattern of undersupply as occurred in Auckland - but what's going to happen is they will all buy, prices will peak, rents will fall and tenants will be poor quality, and then new house supply will come on stream , and prices will fall and stay down for five years. Just like 1991, 1999, 2008.
I'll be honest, I beginning to find that bloody symbol on here still as just a repugnant FU to us all. Another example of a NZder who can't accept the reality. Maybe I'm being a little harsh...but I would like an explanation as to why the hell its still visible? Is some sort of statement being made? Or is it a symbol to highlight a political bias?
The dishcloth on the top of the page serves to remind us of how the important issues are largely ignored by the current government / media, i.e. housing crisis (although gaining some traction), TPPA, immigration, increasing corruption etc. in favour of easy distractions like the dishcloth debate.
Evening all. It seems not all of us are at home crying into our dinners. I've been pretty actively seeking a movement I can join that would at least attempt to give us renters a voice. If anyone is interested, this looks like it's going to be a good start.
https://www.facebook.com/events/1540936792875711/
I'll be there and looking forward to being in a room of people I can be honest about how this is affecting me in all senses, financially, mentally and physically. I'll probably have an angry face on but I'll take support if it's there and I'll take the hate if I have to aswell. Seems I'm having to grow quite a thick skin thesedays...
Happy May the fourth...
Hi Hardworker.
I understand your dilemma. There is not a large enough willing team to invoke change as yet. But small starts lead to greater things.
Can you for instance post what are the different jobs you have. I understand you have 3 or 4.
Someone may be able to assist from the wide range of people who inhabit this site. They are not all bad and grubby money grabbers and big noters screwing the biased rental system and skewed housing systems.
Some actually employ Hardworkers themselves to get ahead.
Thanks Alter ego. I'm a bit of a girl Friday really. Nothing is below me and I'd rather clean toilets than go on the dole (not bagging it) it's just the attitude I was brought up with.
I had to give up one of my jobs recently (bar work) as I work full time at a marketing company during the day (I'm one of the owners) and it was affecting my performance. I was home at 1am and back to work at 8.30 the next day. I'm sure I'll be tagged as 'lazy' and 'entitled' for giving it up but it was killing me. I freelance for start ups and I'll walk dogs, clean, babysit, data entry, errand run..whatever. It was all to get a deposit on a house but now it'll be solely to be able to live when I retire. I'm giving away too much on here I know sigh...but I am just trying to show that we're not all sitting around asking for hand outs! (Although, there are some of my generation kicking up a stink and have no intention of working hard too, I don't deny it...small proportion though...it drives me crazy as much as people assuming I'm one of them)
Anyway. There you have it.
Hardworker, I like your comments and your attitude in general. So I am going to say something to you that will hopefully broaden your outlook, and prevent you from harshly judging others just as you don't like to be judged. I hope you take it in the good spirit with which it is delivered.
I post here frequently about unearned income. So what qualifies as "earned" income? Simple, you produce something.
If you didn't grow something or make something, then you didn't earn it. Because if you didn't grow it, or make something to swap for food, then you live off the back of someone else that does. If you don't produce something then you don't work, you have a job. You actually consume the calories that someone else produces from real work while you do that job.
I think I understand what you are saying but I do both.
I work producing essential items for my clients at my day business. I freelance producing similar things for other clients outside my day job. I supplement both of these things by doing extra 'jobs'. Yet, doing both 'work' and 'jobs' I still struggle to make enough to live where I both work and have jobs.
Sorry if this doesn't make sense but I'm trying to work out what you mean in my own head and if I'm doing something wrong, or looking at my situation wrong.
I don't want to judge, I don't. I'm just trying to make the best out of a really difficult situation.
I am a creative type, so I can use myself as example. If I grow potatoes and my neighbour farms sheep, if we both have a surplus then we trade products for a balanced diet. If I give up growing to sit drawing fancy pictures on a drawing board, or creating digital designs of buildings, then my neighbour has to grow apples and lamb for me now. This only makes sense if my job drawing in some way makes his farming more productive. Maybe I design a better system of fencing that frees up time in his day so that my job becomes real work that saves energy.
This might sound simplistic, but you have to boil it down to basics or you can deceive yourself with your own bullshit. Civilisation is founded on a surplus of food production, without it we all end up subsistence living.
The question to ask yourself is: does your work enhance humanity in someway, or is it just helping you exist to consume calories that someone else has to grow?
Here is a challenge for you, work out how many calories you consume in a day, including electricty and petroleum. I bet your economic activity ledger is grossly negative on this basis, as is mine right now.
I got my neighbour thinking one day when I worked out he consumes 14 days worth of energy in the form of diesel just so he can do one days building work. So even someone productive like him is still hugely negative.
I think I understand what you are saying but I do both.
I work producing essential items for my clients at my day business. I freelance producing similar things for other clients outside my day job. I supplement both of these things by doing extra 'jobs'. Yet, doing both 'work' and 'jobs' I still struggle to make enough to live where I both work and have jobs.
Sorry if this doesn't make sense but I'm trying to work out what you mean in my own head and if I'm doing something wrong, or looking at my situation wrong.
I don't want to judge, I don't. I'm just trying to make the best out of a really difficult situation.
Hardworker - because we have a government (National) that is only do what it needs to to stay in power, and that is serving the needs of the majority. My assumption has been that the majority of voters are slightly older in age (ie part of the boomer generation that own properties - many seem to own more than one...) How else would National remain so popular in the recent past when they seem to be so incompetent at doing anything useful? So I thought I'd do some digging on the population demographics of NZ to see whether an uprising by the so called 'younger generation' would actually make any difference - especially when my assumption is that we are significantly out-numbered by the baby boomers and other older home owners who until recently (I believe) have been secretly content voting National because of the benefits of the 'wealth effect' in property.
A site I found was the New Zealand Demographic Trends paper from 2012. It can be found at the following location:
http://www.stats.govt.nz/browse_for_stats/population/estimates_and_proj…
It states: At 30 June 2012, half the New Zealand population was over the age of 37.0 years, compared with a median age of 34.8 years a decade earlier.
From this you can draw the conclusion that at 2012, half of the NZ population was under 37 years of age. However only those older than 18 can vote. So we are left with only a small proportion of the population that are in that uncomfortable bracket between 18-37 where we:
a. Missed out on the opportunity to buy a house or investment properties at a reasonable price,
b. We don't have the voting power to bet the older generation who have until now been content voting National because they're all getting rich in this environment of greed. And chances are the majority of the population 37 years or older in 2012 already owned property.
Now I'm no statistician so there are more than likely significant floors in the conclusions I draw from the data above - but those older people who tell the younger generation to get off their butts and vote I say why? You are the voting majority. You control the voting ballot because of the vast number of you. You own the property. You are the ones benefiting in this environment. We can't beat you if you continue to group together like you have in the recent past.
The only way we can see change is to convince the older generation to grow a conscience and for them to vote differently. But they seem to be a stubborn and greedy old lot. Gordon appears to be a shinning light, hopefully the spark the oldies need to see what is needed.
It's all cyclical. When the young and new immigrants realise they can't afford to live here they'll start leaving in droves. Economy and property prices will deflate.
I can't help but think of Ireland in recent times.
http://www.irishtimes.com/opinion/una-mullally-no-country-for-young-men…
The Jafas are taking the Chinese hot cash and relocating to other cities - school rolls have increased markedly in Hamilton, Tauranga, Whangarei etc due to the influx of families who have cashed up out of Auckland. The Jafa complains about the Chinese invasion of Auckland and now the people in the provincial towns and cities complain about the invasion of the Jafa with their piles of cash. The Jafa investor is now also running rampant in the Waikato, Bay of Plenty and Wellington regions. All off the back of cheap 4% loans using massive equity increase in their Auckland properties. Now there are too many homes to rent in Hamilton compared with demand for them!
I sense a disaster ahead in these smaller cities when it all comes crashing down!
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