Post-election lift - in some areas

Stable interest rates and a decisive election result have rejuvenated the property market in some parts of the country, Quotable Value’s latest statistics show.

Monday, October 6th 2014, 12:00AM

by The Landlord

The latest QV Residential Price Movement Index shows nationwide residential property values for September increased 6.4% year-on-year, and 1.1% over the past three months.

The Auckland market was up 10.3% compared to a year earlier.

QV spokeswoman Andrea Rush said the national index showed growth in property values was slowing.

“Auckland, Christchurch and Dunedin saw home values increase, while Tauranga remained flat over the past three months. Wellington values continued the downward trend of recent months and Hamilton values were also slightly down over the past three months. Following a lull in sales activity and low listings in the lead up to the election, the election result coupled with the coming of spring and stable interest rates is bringing renewed interest and activity to the market.”

In Auckland, property values increased 1.8% over the most recent three months.

Valuer Bruce Wiggins said: “Values are still rising but rate of growth has slowed significantly. There could be a number of factors that have contributed to this over the winter including a low number of listings, the traditional winter effect, and the lead-up to the election however there is now increased activity being reported in the market.”

He said people looking to upgrade from their first home might have decided that the jump to the next level of property was too big.

“For example a home bought three years ago in the $400,000s could now be sold for around $700,000. However, the next step could be around $1 million and for some this may be a step too far in terms of required borrowing,” Wiggins said.

Hamilton’s values dropped 0.9% over the past three months but increased 2.7% year-on-year.

Valuer Nicky Harris said: ““There are more first-home buyers coming back into the market with the availability of Welcome Home Loans but this has not yet appeared to have had an effect on values as buyers are still cautious.”

Tauranga City prices remained stable with no change over the past three months and had increased 4.5% year-on-year.

Valuer Mairi Macdonald said: “There’s increasing interest from first-home buyers as banks relax lending criteria and increase flexibility and there’s also increased confidence in market since the election now that the result has created certainty.”

She said house and land packages were popular in all price brackets, particularly as first-time buyers only needed a 10% deposit to build.

Wellington’s prices are dropping. Valuer Pieter Geill said: “Buyers are often fickle and looking for a reason not to buy rather than a reason to buy. There is also an element of over-pricing with sellers’ expectations higher than what buyers are willing to pay.”

In Christchurch, prices are up 5.1% on August last year and up 0.3% over the past three months. Home values in Dunedin City have increased by 0.3% over the past three months and 1.7% year-on-year.

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