Property Report: Rodney and city apartment markets play catch up

Homes in places such as Orewa in Rodney, north of Auckland, are starting to rise in value.

The latest QV.co.nz E-Valuer quarterly report shows a drop in home values in many Auckland suburbs in the final quarter of and during January.

However, values continued to increase in Rodney and the central city apartment market as these areas played catch-up on value gains seen by other suburbs where value rises appear to have peaked.

Of the most significant is a drop in home values on the North Shore, where 35 of the 36 suburbs listed in the QV.co.nz E-Valuer quarterly report showed a decrease in values in the three months to December. The greatest decrease was in Schnapper Rock, where values dropped 5.1 per cent; followed by Narrowneck (4.8) and Albany (4.6). However, to put that in context, all 36 North Shore suburbs listed in the report rose between 12 and 21 per cent in the year since December 2014, and 21 have average values of more than $1 million.

In the former Auckland City Council suburbs, more than half the 50 listed showed a drop in average home values in the final three months of last year. St Johns was down the most, decreasing 2.9 per cent; Meadowbank dropped 2.1 and Glendowie decreased 2.1.

However, all three suburbs have average values of more than $1 million. Glendowie has the highest of the three, with an average value of $1,444,550.

Auckland Central saw the greatest percentage rise, with values up 3 per cent. This is most likely due to the apartment market seeing significant growth in the final quarter of the year as people looked to find a more affordable entry into the market after being priced out of the stand-alone home market. New high-end apartment developments are also popular with baby boomers down-sizing for retirement.

In Manukau 15 out of the 39 suburbs saw home values drop over the same period. Burswood was down the most (3.3), Pakuranga Heights dropped 3.1 and Farm Cove decreased by 1.9.

In Waitakere, 7 out of the 17 suburbs saw home values drop over the year's final quarter and it appears the most affordable suburbs that are popular with investors were the ones in which values dropped the most in the past three months to December, including Ranui (down 1.6 per cent), Glen Eden and Henderson which were down 1.3 and Massey down 1.1.

QV Valuers have noted values have dropped across Auckland investor housing property stock over the past four months. It's likely investor activity is being curbed by last year's new rules, including the requirement for a higher (30 per cent) deposit for investment properties and the capital gains tax for investment properties bought and sold within two years. Anecdotal evidence suggests the Chinese Government restricting capital flow out of China has made it more difficult for Chinese new migrants or foreign investors to purchase property here.

At the time of writing this column, reports were that activity levels during February were picking up across the city, as were auction clearance rates and that Chinese buyers are back in the market.

So it will remain to be seen if the downward trend in home values in many Auckland suburbs will continue over the next few months.