New Zealand house values rose at their fastest annual pace in more than eight years, as demand for Auckland housing overflowed to nearby regions, with Hamilton prices jumping 9 percent over the past three months, according to Quotable Value.
National property values advanced 13 percent in the 12 months through September to an average $542,277, the state-owned agency said in a statement. Values in Auckland jumped 23 percent over the same period to $896,676, outpacing a 16 percent rise in the national average value for urban areas to $649,583.
On a quarterly basis, national values increased 4.2 percent, outpaced by Auckland's gain of 6.7 percent since the end of June. Hamilton City values rose at the fastest pace in the quarter, rising 9 percent to an average value of $416,290, and taking the annual increase to 15 percent.
Demand for housing in Auckland, where migrants and investors are adding to competition for a shortage of housing stock, is spilling over into other parts of the upper North Island. The Reserve Bank of New Zealand has singled out Auckland property prices as a key risk to New Zealand's financial stability, while at the same time cutting its benchmark interest rates in June, July and September.
Tauranga values gained 11 percent over the past year, and were up 3.5 percent since June, to an average value of $502,771.
QV said an increase in property investors was driving sales activity, with turnover rising ahead of new bank lending restrictions from Nov. 1 and tax changes to cool investor activity, which came into effect today. Sales volume was between 36 percent and 43 percent higher over the past three months, compared to the same period a year earlier.
"The high number of sales over the winter period could also be a result of buyers wanting to get in before the government and Reserve Bank's changes around lending and tax rules, most of which come into effect today," Andrea Rush, QV spokeswoman said. "Some of these sales can be attributed to Auckalnders relocating out of the city or investing outside of Auckland and first home buyers taking advantage of changes to the KiwiSaver and record low interest rates."
Wellington showed modest annual growth of 2.4 percent, with values down 0.1 percent in the past three months to an average value $546,105. Christchurch values increased 2.9 percent on the year, and were flat over the last three months at an average value of $474,814.