Property values rise at slowest pace in 15 months - QV

Photo / Chris Gorman

New Zealand property values rose at the slowest annual pace in 15 months in September, while certainty after the general election, new spring listings and interest rates remaining on hold renewed interest in the market, according to state-owned valuer Quotable Values.

Property values rose 6.4 percent nationwide in September from a year earlier, slowing from an annual pace of 6.9 percent in August, according to QV. Housing values are now some 16 percent above the previous market peak in 2007.

Last week, Auckland's largest realtor, Barfoot & Thompson, said house sales rose in September, snapping three consecutive months of decline in the country's largest city, while the average price rose to a record. House sales had slowed in the lead up to Sept. 20 general election as electoral uncertainty spooked house hunters, particularly those at the lower end of the market, with both major political parties proposing reforms to try and rein in housing affordability.

The incumbent National party has been returned for a third-term in government, and will introduce policies allowing prospective buyers to tap into more of their Kiwisaver funds and give power to councils to fast-track residential development.

Meanwhile, at his September monetary policy statement, Reserve Bank governor Graeme Wheeler kept interest rates on hold and signalled a slower pace in future hikes, after increasing the official cash rate 100 basis points to 3.5 percent in four consecutive increases starting in March.

The hikes had been intended to take the steam out of an over-heating property market in Christchurch and Auckland, and lower-than-expected inflation figures and a decline in dairy prices have seen the governor wait to assess the impact of the hikes.

"The New Zealand index is showing an increase in residential property values but the rate of growth continues to slow," Andrea Rush, QV spokeswoman, said in a statement.

"Following a lull in sales activity and low listings in the lead up to the election, the election result couples with the coming of spring and stable interest rates and is bringing renewed interest and activity to the market."

Today's figures show property values rose 1.1 percent in the three months ended Sept. 30, slowing from a 1.7 percent pace in the three months ended Aug. 31, and a 2.3 percent pace in the period ending July 31.

QV said Auckland property values rose 1.8 percent over the past three months, and 10.3 percent on an annual basis. Christchurch city values rose 0.3 percent in the three months, and were 5.1 percent higher than in September last year.

Wellington values fell 0.9 percent in the three month period and rose 0.3 percent on an annual basis.