Tauranga prices on the rise

Tauranga is starting to see property prices rise as Aucklanders cash up and move out.

The latest CoreLogic/QV Monthly House Price Index shows that nationwide property values are up 9 per cent year on year and 3.1 per cent over the past three months.

CoreLogic director of research Jonno Ingerson says: "Auckland values are rising much faster than anywhere else. No news there. In the past 12 months values have increased 16.1 per cent and 5.4 per cent over the past three months.

"Part of the reason for the rapid increase is a bit of catch-up following a slow-down in 2014, when the market reacted following the introduction of LVR speed limits in late 2013."

Ingerson says the annual increase in Auckland is the fastest he has seen for several years, "but it's not the fastest it's ever been".

CoreLogic's data shows that from 2002 to 2004, values were increasing at an annualised rate of more than 15 per cent and peaked at more than 21 per cent. In late 1994, annual increases peaked at 26 per cent and 22 per cent in early 1996.

"So this latest rate of increase is actually not that extraordinary," he says.

"There is no sign of a slowdown in Auckland values ... yet. But the ink on the Government's announcements is barely dry, so it will take a while for any slowdown to come through, if indeed it does."

One place to watch is Tauranga, the only other main centre that is showing a slightly faster rate of increase, up 6.7 per cent year on year and 4.1 per cent over the past three months. "This increase in Tauranga values could be attributed to a spread of the 'Auckland effect' whereby buyers are now considering cheaper alternatives to the expensive Auckland market," says Ingerson.

"Equally, it could also just be local effects. There is little evidence that values are increasing in other areas close to Auckland.

"The move by the Government to apply capital gains to properties re-sold within two years also looks to be a smart one that will primarily impact the Auckland market. Our analysis of sales turnover shows that in Auckland the most common 'hold period' is one year."