Less hype but values, volumes remain high

There is a lot of talk around the Auckland housing market that there might be a bit of a slow-down starting.

There are reports of fewer people at open homes, more homes passing in at auction and instead selling by negotiation afterwards. More homes are selling with asking prices up-front than by auction.

However, the data around the market is not reflecting any slowdown in values. Sales volumes remain high, up by more than 30 per cent on this time last year and the latest QV House Price Index show some of the largest increases in value Auckland has seen since the early 90s.

While all areas of the Super City have continued to see significant value increases over the past year, areas showing the greatest percentage rise are the most affordable parts of the city.

The outer urban rural fringe suburb of Papakura is seeing the highest rate of value increases. This market is still extremely hot and activity and demand remains high with values up 29.8 per cent year on year and 11.4 per cent over the past three months. The average value in Papakura is $569,096.

Across the North Shore to Onewa, Glenfield, Birkdale, Beach Haven, Northcote, Chatswood, Birkenhead Central, Marlborough and Hillcrest, has seen the highest rate of increase with home values up 25.6 per cent year on year.

The average value in this area is $856,484, an increase of 72.7 per cent since the previous peak of 2007. To put these rises into context, the Wellington region has only risen by 0.1 per cent since the peak.

In the old Auckland City Council areas, the Auckland City-South suburbs, such as One Tree Hill, Sandringham, Mt Roskill, Three Kings, Mt Albert, Wesley, and Otahuhu, continue to rise in value the fastest, up 26.2 per cent year on year and they are now 80.2 per cent higher than they were in 2007. The average cost to get into these suburbs is $969,825.

In Manukau, the North Western suburbs, including Mangere, Mangere Bridge, Mangere East and Papatoetoe have continued to see huge rises in value, up 29.3 per cent year on year to an average value of $646,673.

Overall, there seems to be less hype, less panic and more caution from buyers. There may be some realisation that the rate of value increases we have seen over the past year are not sustainable and people may be deciding to do their homework before putting an offer in.

The latest legislative changes have led to Auckland investors looking for property in Hamilton, Tauranga and Whangarei, Wellington, Christchurch and Dunedin.

There are also reports that activity from Chinese buyers has reduced, apparently, the Chinese Government has restricted capital flows out of China. This is likely to be short term.

Net migration continues at record highs and interest rates are at record lows so, with these market drivers still at play, it's possible we may just be seeing a short term slowdown in activity and demand in the Auckland market as we did after the LVR speed limits were introduced.

How this affects property values over the coming weeks and months remains to be seen.