QV predicts activity flurry

QV is expecting a short-term flurry of activity as people who have been preapproved for loans get their housing deals done.

Wednesday, October 9th 2013, 12:00AM

by The Landlord

LVR speed limits kicked in this month but many low-deposit buyers had already been issued approvals.

The organisation has released its latest monthly property value index, which shows nationwide residential values for September were up 8.4% over the past year and 2.6% over the past three months.

Nationally, prices are now more than 9% up on their 2007 peak.

Auckland’s prices have increased 13.% year-on-year and values are now 21.3% above their previous peak, or 5.6% when adjusted for inflation.

QV research director Jonno Ingerson said: “Nationwide values continue to rise, driven primarily by Auckland and Canterbury where high demand and short supply are pushing prices up. Most of the rest of the main cities and provincial towns are also increasing but at a much more modest rate.”

Hamilton and Tauranga’s values are up 3.9% over the past year, Wellington’s have slowly increased 2.9%, Christchurch’s are up 10.8% and Dunedin’s market is stable.

The provincial centres are experiencing growth of 2% or 3% compared to the past year. In the North Island, Whangarei, New Plymouth and Hastings are all up. South Wairarapa is up 3.3%, although Masterton and Carterton have both declined.

Ingerson said the LVR speed limits imposed by the Reserve Bank would take some time to fully affect the market because of the number of preapprovals that were yet to be drawn down.

“This is likely to cause a short term flurry in activity as people rush to secure a property before their preapproval expires. While the LVR caps may have an impact on first home buyers with limited deposits, it is likely to have little impact on other buyers. What remains to be seen is whether the overall activity and price levels in the market are affected, particularly in areas with more affordable properties.”

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