Auckland values to rise throughout 2015
12:00 PM Wednesday Jan 14, 2015
- Auckland Council
- Auckland Region
- Monetary Policy
- Property Investment
- Residential Property
Auckland house values rose at almost twice the rate of the rest of New Zealand, up 9.8 per cent or $68,309 in the last year, and are being picked to shoot up further this year.
Quotable Value has just released its latest statistics which it said were powered by CoreLogic and that showed Auckland value rises sped up towards the end of the year, up 4.2 per cent in the final three months alone.
Auckland values are now 39.4 per cent higher than the previous peak of 2007.
Auckland house values jumped from $693,549 last December to $761,858 last month, QV said.
National house values rose 4.9 per cent or $22,652 last year, from $466,022 last December to $488,674 last month.
Jonno Ingerson, director of CoreLogic, said the outlook for this year was for values to continue up.
Sales turnover would remain buoyant in the first few months but the lack of listings would continue to constrain the market, he said.
"Given strong migration, continuing low interest rates, a shortage of housing and good consumer confidence, values are likely to keep increasing in Auckland throughout this year. There may be modest increases in some of the other main centres, but most smaller centres are likely to remain steady."
The Reserve Bank says it is prepared to introduce further measures to slow down the market if necessary, he noted.
"Given that during the last three months of 2014, Auckland values rose faster than they did during the 2003 to 2007 boom, and some of the other main centres are also rising again, the Reserve Bank is likely to consider what action to take," Ingerson said.
"This may include further restraints on bank lending given that interest rates are unlikely to rise until later this year."
QV said values in the old Auckland City area rose 10.4 per cent from December 2013 to last month and 5.3 per cent in the last three months of 2014 and QV said that illustrated the fast acceleration rate in the last quarter of the year.
Waitakere City homes values rose 10.7 per cent year on year and 4.4 per cent since the beginning of October.
North Shore City values rose 8.9 per cent year on year and 3.3 per cent in the last three months of the year.
Manukau City values rose 9.5 per cent year on year and 3.3 per cent since October; Papakura District values were up 10.6 per cent and 5.6 per cent and Rodney District 7 per cent and 0.9%.
Andrea Rush, QV national spokesperson, said values did not go up smoothly.
"After a slow start to the year following the introduction of the LVR speed limits, values picked up in February and March but then following four interest rate hikes during March and July value increases plateau-ed.
The prospect of further interest rate rises in the lead up to the election seemed to cause some uncertainty as to whether the market had peaked and this led to a slowdown in the market during the middle of the year.
"For Auckland and Christchurch, value increases slowed while in some other centres such as Wellington, Hamilton and Dunedin saw a decrease in values during this period.
However, once the election was over and interest rates rises were put on hold, there was a surge of new listings and activity with the coming of spring and values began to tick upwards again in most of the main centres.
"The return of relatively low interest rates offered by the banks with cash incentives coupled with record migration levels has since led to a strong reacceleration of values in the Auckland," she said.
Christchurch values increased 3.2 per cent year on year and 1.8 per cent since October.
Value increases in Christchurch City have slowed somewhat as the number of homes repaired increases and new homes coming onto the market is seeing supply being to keep up with demand, QV said.
QV CoreLogic 2014 in Review Media Release Jan 12 2014
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Contributed by: Hamish Fletcher, The New Zealand Herald
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