Property values up just a notch in Auckland, listings down

Auckland is suffering a fall in inventory levels, with listings down 9.2pc on the same time last year.
Auckland is suffering a fall in inventory levels, with listings down 9.2pc on the same time last year.

The value of the average New Zealand property increased by 3.9 per cent in the past three months to $577,829, according to Quotable Value.

While the average value of an Auckland property rose to $955,793 in the past quarter, the latest 3.3 per cent increase was slower than the nationwide pace.

Real estate website Realestate.co.nz released its own monthly numbers today, showing the average asking price for a home has hit $570,971 - up 7.2 per cent from the same time last year.

There was also a 7.1 per cent fall in the number of new properties coming onto the market in May with the long term average of new listings also down.

QV says that property values were up across New Zealand by an average of 12.4 per cent in the last year and by 15.4 per cent in Auckland.

QV's spokeswoman Andrea Rush said that if property values in Auckland continue to rise at the same rate in 2016, then this time next year the average value will top $1 million.

Hamilton values were up 4.9 per cent over the past three months to an average of $478,323 - up 26.2 per cent year-on-year.

In Tauranga, the average value of $591,942 was up by up 4.9 per cent over last quarter and 23.1% across the year.

The average property value in the Wellington region ($504,794) rose by 4 per cent over the past three months and 10.2 per cent year-on-year.

The rate of increase was much slower in Christchurch where the value of an average property had risen 1.1 per cent during the last three months and 3.3 per cent year-on-year to $490,137.

"Migration is continuing at the highest levels seen in 100 years and this population growth coupled with growing demand from investors, means housing supply, particularly in Auckland and Queenstown, is not able to keep up with demand and this is driving values ever higher," said Rush.

"While it is clear Auckland needs more housing, both within the existing urban metropolitan boundary and on 'future urban' zoned land, as well as new infrastructure to service it. It appears to be investor demand that's driving the rapid value growth in Auckland and other parts of the country," she said.

Much of the activity in housing markets around the country was driven by investors, said Rush.

"Tauranga, Hamilton, Wellington, Dunedin and Queenstown values continue to see particularly strong growth, as do many other regional centres and smaller towns located within commuting distance of these main centres."

"The Christchurch market by comparison is slow and steady with normal levels of activity and sales volumes but little value growth as supply is now meeting demand for housing in the city."

According to the International Monetary Fund's (IMF) latest survey, Qatar is the only country in the world which saw house prices rise faster in 2015 than those in New Zealand.

It also found that New Zealand had the highest house price to income ratio index in comparison to the rest of the world.

Figures revealed New Zealand's house prices increased 14.6 per cent, topping real house price growth in comparison to Hong Kong, Sweden and Australia.

Asked about Auckland's average hitting the $1 million mark, Prime Minister John Key said there would always be a range of prices.

"If you go on Trade Me this afternoon and google property $500,000 or less in Auckland, you will find there are quite a few.

"We are doing our best to get on top of the rise of average house prices, and house prices generally.

"I don't think any one particular thing - from a national policy statement to a bright line test of itself will be the silver bullet, but I think, overall, the combination of them will."

Building and Housing Minister Nick Smith said the problem was a lack of land supply, and tomorrow's national policy statement - designed to make Auckland Council open up more land - would help.

"Property prices in Auckland are continuing to rise too quickly, and all the more important that the Government advances its long-term plan to get that issue under control."

On the problem of speculators and land bankers, Dr Smith said one of the best responses was to bring land value increases under control by addressing supply issues.

"We need to get house price increases back into single digits."

During question time, Dr Smith pointed to recent building figures. That led to a retort from New Zealand First leader Winston Peters.

"In the whole history of humanity, in this country or the whole wide world, has he ever seen someone living in a consent," Mr Peters said to laughter.

Real estate website Realestate.co.nz released its latest monthly numbers today, showing the average asking price for a home has hit $570,971 - up 7.2 per cent from the same time last year.

There was also a 7.1 per cent fall in the number of new properties coming onto the market in May with the long term average of new listings also down.

"In this environment, if no new listings were to come onto the market nationally and all the existing properties sold, theoretically there would be no properties for sale in New Zealand within 12 weeks," said Realestate.co.nz spokesperson Vanessa Taylor.

"It's a classic supply and demand situation and right now it's definitely a sellers' market."

Auckland is also suffering a fall in inventory levels, with listings down 9.2 per cent on the same time last year.

Taylor said a fall of close to 10 per cent in listings in one year in a city the size of Auckland was "very significant".

"At the same time Auckland asking prices have risen in the past month by 2.1 per cent (compared with April 2016) albeit off a high value base," she said.

Auckland asking house prices have risen 10.9 per cent compared to the same time last year.

Today's property stats mark the start of a busy week for the sector.

Auckland's biggest real estate firm Barfoot & Thompson is likely to release its Auckland sales stats on Friday.

The Government is releasing a national policy statement tomorrow which is likely to require some councils to relax restrictions on where houses can be built.

"[A decision on land] will be one held by conditions set by the national policy statement" John Key said. "That's where the power of national policy statements come in."

The statement will include specific thresholds for growth, which will trigger a requirement to allocate more land for residential development.

- NZ Herald

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