Grab your property bargain in NZ's deep south

The market in Dunedin, the biggest city in the deep south, was burgeoning thanks in part to its location in the affordable price bracket. Photo / NZPA

The deep south could be the place to get a property bargain as prices in the traditional hotspots plateau at a level beyond the reach of many first home buyers.

The latest QV figures indicated that despite evidence of some cooling across the board, cities and regions close to Auckland continued to rise - albeit it a slightly slower pace since new LVR rules were introduced mid-2016.

The market in Dunedin, the biggest city in the deep south, was burgeoning thanks in part to its location in the affordable price bracket - average value of $354,133 - still well below the $600,000 price-cap for first home buyers hoping to secure a KiwiSaver grant.

Meanwhile figures released by Statistics New Zealand yesterday showed home-ownership levels nationwide were at their lowest point in 66 years, with 63.2 per cent (1.2m of 1.8m) private dwellings owner-occupied, compared to the record low 61.2 per cent (302, 185) in 1951.

QV National spokeswoman Andrea Rush said the market slowed in December, particularly in the main centres, since the new restrictions requiring a minimum 40 per cent deposit for investment properties was imposed last year.

"This coupled with the annual Christmas holiday period slow-down has led to a decrease in values in some parts of Auckland, Hamilton and Christchurch."

Average values in Auckland had dropped by $4208 from $1.051m in November last year to $1.047m in December. However, prices were still following an upward trend, albeit at a slightly slower rate.

Rush said values in the capital region continued to rise faster than Auckland, but was still slightly slower than before the LVR changes.

Wellington's average house values rose 20.5 per cent year on year, compared to Auckland's 12.5 per cent, and had now peaked at $574,410 in December, up $8779 from November.

Elsewhere in the South Island most areas continued to see a rise in value over the past year, with other strong performers Queenstown up 31.6 per cent year on year and the MacKenzie District up 25 per cent year on year.

However, Queenstown's values saw it fall within the "luxury" range with its average value of $1.022m nudging Auckland's prices.

The average nationwide value in December was $627,905 up $3230 (0.5 per cent) on the previous month.

The New Zealand Initiative's senior fellow Bryce Wilkinson said the property prices and the renting-owning ratio gave "ample evidence for genuine concern".

"These very high housing costs are hitting people with the lowest incomes," he said. "We are seeing reports of overcrowding in housing and people are sleeping in cars.

He believed the answer was a "no-brainer" and lay in freeing up land for greater residential development.

"There is no shortage of land in New Zealand compared to countries like the UK, we've got vastly less population, no excuse at all to lowering the value."

Yesterday the Leader of the Opposition Andrew Little echoed a similar call in pushing for the other political parties to back a couple of Labour's bills before Parliament this year, that would could see more homes built.

"With more and more Kiwis locked out of owning their own home and stuck renting, it's time for Parliament to come together and solve the crisis."