The average value of homes is flattening out and starting to decline in many parts of the country, according to Quotable Value (QV).
"Nationwide value growth continues to ease back due to lower demand in the housing market caused by the latest round of LVR [loan-to-value ratio] restrictions and tougher criteria from the banks as we head into the winter months," QV national spokesperson Andrea Rush said.
"Sales volumes are lower than they were this time last year particularly in Auckland, and it's possible market activity may now remain more subdued until after the election.
"Value growth continues to be stronger in Wellington and Dunedin than in the other main centres, but is also starting to ease back a little.
"With Auckland and Hamilton only seeing very slight value growth over the past three months and values dropping slightly in Christchurch, these markets are relatively flat by comparison.
"Values in Tauranga are showing stronger quarterly growth than last month but across the board it appears much of the frenzy has come out of the housing market there and it has returned to more normal levels of activity and demand," she said.
Auckland. Average dwelling value $1,044,561.
The average dwelling value was just 0.1% higher in May than it was in February, and values in some areas (North Shore-Onewa, Waitakere, Central Auckland suburbs, Manukau Central, Manukau North West, Papakura) are lower than they were three months ago.
"We are seeing a return to more normal conditions in the Auckland market," QV Auckland Homevalue manager James Steele said.
"There are more properties listed for sale, there is also demand and properties are selling, but some of the heat has come out of the market and buyers are being more picky.
"We are also seeing vendors who are willing to withdraw their properties from the market if they do not achieve the price offer they are wanting."
Hamilton. Average dwelling value $537,152.
Average values declined in most parts of the city compared to March but remain up by 0.9% compared to three months earlier.
"The Hamilton market is experiencing a bit of a winter slow down and sales volumes are down on the same time last year," QV Hamilton Homevalue manager Stephen Hare said.
"There is more demand than supply for entry level properties in the under $400,000 price bracket.
"Properties that are well located and presented are selling well unless the vendor's price expectations are too high.
"Properties with any issues are taking longer to sell than they were when the market was more frenzied."
Tauranga. Average dwelling value $683,012.
Average values in Tauranga have risen by 1.3% in the last three months.
"Activity in the investor market in Tauranga is now at more normalised levels," QV Tauranga Homevalue manager David Hume said.
"The Western Bay of Plenty market is showing steady growth although not at the frantic levels seen throughout 2016."
Wellington Region. Average dwelling value $607,907.
Wellington's average dwelling value has risen by 3.1% over the last three months.
"The Wellington market remains buoyant but there are signs it is losing some steam as winter approaches," QV Homevalue valuer David Cornford said.
"There is less market activity, a decrease in the number of sales and less buyer demand compared to the previous 12 months.
"This has led to the rate of value growth plateauing or even slightly decreasing and some properties taking slightly longer to sell.
"Good prices are still being achieved however the market is less frantic and properties with undesirable features are now sitting on the market for longer."
Christchurch. Average dwelling value $495,070.
The average dwelling value in Christchurch has declined by 0.7% over the last three month and remains just 1% higher than it was 12 months ago.
"Growth is the lowest seen in Christchurch in a number of years and now that we are heading into winter we are unlikely to see this pick up in the near future," QV Christchurch valuer Daryl Taggart said.
"Recent stats show that the heat has come off the market and value growth is stalling.
"Couple this with a continuing reduction in rental returns over the last 18 months and investors will be looking at their bottom line."
Dunedin. Average dwelling value $373,810.
The average value of homes in Dunedin has risen by 3.9% over the last three months.
"We continue to see steady demand across all parts of the Dunedin market," QV Dunedin valuer Aidan Young said.
No chart with that title exists.
37 Comments
Its funny how the MSM go searching for that corner of NZ that still shows decent growth:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…
What do you think National has done that has had any effect on this? Can you point to anything?
As opposed to, for example, what the Chinese government has done.
Who knows, maybe National's promise to build 2,000 affordable houses over the next ten years while increasing subsidies has shaken the property market to its core.
Do you mean how in China nobody can own land, you live where the government tells you whether you like it or not and if you complain they put you jail?
I can see how that would certainly solve our dysfunctional housing market.
Mind you, we would have to institute currency controls because it turns out people try and escape such a system. Except for the party crony's who run it of course.
House price are so high and the problem so bad that it is just scratching and where is the solution.
National government has failed miserably and have done nothing as a government to bring sense into property market. In fact have helped and supported this housing ponzi.
3 terms have made them so arrogant that they care damn. Only now being election year are trying to show as if they care but the reality is that is all a gimmicks to get vote and than can show their true colour.
This election should be for change.
This is a merry-go-round discussion we have, every few days.
Labour was guilty of incompetence, but National identified the housing crisis and campaigned on their readiness to take action to fix it. They then spent the next nine years cynically denying any crisis exists, and only made things so much worse.
Labour: incompetence at the time.
National: cynical dishonesty and behaviour.
The QV comment that this is merely a blip, before prices rise further, is a worry. I believe it may be influenced by the RB but the reality is that the bubble was as inflated as it could be without resulting in substantial economic change. A lot of industries in Auckland are dependent on viable rentals and house prices, including international students, manufacturing, and even teaching. Many of those have options elsewhere in New Zealand, and that impacts prices.
I suggest that rental yields need to align more closely to interest rates.
https://www.barfoot.co.nz/market-reports/2017/january/suburb-report
House prices to reduce 20% - 40% and rents to increase at similar rates.
I haven't counted, but the word "value" is sprinkled very heavily throughout that report - it seems in just about every sentence. To me, when the average Auckland dwelling has a price of $1,044,561 it has no value, and at this point the "value growth" they enthusiastically tout is something that will occur when prices go down. I probably should watch more reality TV, so that I may understand value as it exists in 21st century New Zealand.
Well, it's all relative. To me personally 'VALUE' = an estimated monetary worth of something. In Auckland an average house price is worth 1mil, because that's what someone will pay for it even though it is 10 times the average local salary. In other pats of the world an average dwelling costs up to 36 times the local salary and houses are still being bought. In London it's 12-17 times higher then the local average wage and is expected to increase about 11% in the next 4 years. So it's all relative. https://www.numbeo.com/property-investment/gmaps_rankings.jsp It's interesting to observe this around the world.
Government's are largely impotent when it comes to regulating property markets.
Over time, property markets tend to determine their own price levels, largely (but not completely) irrespective of government policies/regulations.
It's a bit like building seawalls: they can have some useful effect in the short term - but in the longer term nature inevitably has its own way.
Those people who spend their time suggesting that governments should intervene in "this, that and every other way" should find themselves another hobby. Like governments themselves, these people seldom achieve too much......
Has anyone switched the QV chart show percentage change " year on year " that shows a considerable drop off.
See it all depends on how you interpret the data. I find this article give a more accurate view:-
Annual value growth has now dropped to below 10% - both nationally and in Auckland, according to the latest QV House Price Index.
“Sales volumes are lower than they were this time last year, particularly in Auckland, and its possible market activity may now remain more subdued until after the election.”
http://www.landlords.co.nz/article/6156/market-returning-to-normal?utm_…
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