House prices in many parts of New Zealand are still rising at double-digit annual rates but they are falling in the Auckland region and the odd smaller centre.
That meant that nationally, annual house price growth slowed to 2.5 percent in March, down from an annual pace of 3 percent in February and 7.3 percent in March last year, according to the latest Quotable Value data.
“Affordability constraints have put the brakes on national value growth, particularly in high-value regions,” QV says.
General manager David Nagel says areas such as Rotorua, where the average price rose 7 percent to $472,566, and Hawke’s Bay are seeing the strongest growth – the average price in central Hawke’s Bay rose 15.6 percent to $379,225.
“We’re seeing increased demand for different types of housing such as low maintenance, architecturally designed townhouses in Wellington,” Nagel says.
“These properties offer buyers good value for money and we’d expect this trend to continue, particularly in our larger, higher-value cities.”
QV says the figures are for March but its index is based on settled house sales and are prepared on a three-month rolling average basis. Its data can include house sales that went unconditional as long ago as December or even earlier.
The Real Estate Institute’s monthly data, which records unconditional sale agreements in February and so is much more timely, will probably be released within the next two weeks.
Nagel says the Tax Working Group’s proposed capital gains tax shouldn’t impact investor activity substantially in the short term, although this might change in the months leading to its likely implementation date in April 2021.
But the Reserve Bank’s change of stance last week – it now expects the next move in its official cash rate will be down – “may increase demand for residential property across New Zealand,” Nagel says.
Hotspots in QV’s data include Kawerau, up 24.2 percent, Wairoa, up 22.4 percent and Tararua, up 15.6 percent. The city with the most house price inflation was Dunedin, up 13.3 percent with Upper Hutt coming second with 12.3 percent annual house price growth while the Wellington region saw growth of 8.4 percent.
In the Auckland region, prices were 1.5 percent down on a year ago with coastal North Shore showing the greatest degree of house price deflation at 4.1 percent. Rodney’s Hibiscus Coast was the outlier in the region with annual growth of 0.9 percent.
The national average house price was $686,523 but the average in the Auckland region was $1.04 million. Coastal North Shore was the most expensive part of the country at $1.36 million.
The average in the Wellington region was $702,896 and the most expensive part is the western suburbs such as Kelburn, Wadestown and Karori with an average $937,822.
The cheapest place to buy a house is in Buller with an average of $191,552, followed by Ruapehu on $206,836.