Aucklanders driving local house market

Auckland is driving up Northland house prices.

Auckland investors are snapping up as many as four Northland properties each, causing prices to increase and properties to sell quickly, a local real estate expert says.

QV's May residential price movement index showed average home values increased across the region year-on-year.

In Whangarei, house values increased by 3.9 per cent to $350,040; in Kaipara, values increased 3.3 per cent to $345,015; and in the Far North, they increased 1.8 per cent to $303,431.

Barfoot and Thompson Whangarei branch manager Martin Dear said growth in the middle of the market had been "unbelievable".

"We've seen huge increases in the market," he said. "A lot of people are coming to Whangarei, realising they can get good value for money.

"It's not uncommon for Aucklanders to buy three or four properties as investments.

"If they get them in good areas, they can get good tenants and good returns."

Some professionals and businessmen were also moving their families north, Mr Dear said.

"It's all very positive for Northland. First-home buyers are also coming back in to the market.

"Often houses that went to auction wouldn't sell until afterwards but now they're going on the day."

The top end of the market was moving slower, he said."We haven't seen huge increases in value at the top end of the market.

"We're moving towards a vendor's market in the mid-range residential properties but the higher-end coastal properties are still in a buyer's market."

Nationwide, residential property values continued to soar in May - up 3.1 per cent over the past three months and 9 per cent year-on-year.

This was the fastest year-on-year rise in 15 months, taking values to 24.1 per cent above the previous market peak of late 2007.

QV national spokeswoman Andrea Rush said the market continued to be affected by activity in larger centres.

"The steepening line of the national index reflects value increases across all of New Zealand's main centres over the past three months with the exception of Wellington, which is showing a slight decrease," she said.

"The usual winter downturn does not seem to have dampened demand as high net migration, relatively low interest rates and a constrained housing supply continue to fuel demand in the Auckland market.

"This demand is also now spreading to provincial centres nearer to Auckland with values up in Tauranga, Hamilton, Cambridge, Pokeno and towns in the Hauraki District."

Changes coming in October, include the Reserve Bank's new loan-to-value ratio limits, requiring borrowers in the Auckland Council area to have a deposit of at least 30 per cent.