Southern market values star

Dunedin is the only main centre to buck the flat-lining growth trend seen around the country in QV’s latest House Price Index.

Thursday, June 7th 2018, 7:00AM

by The Landlord

Dunedin is the only main centre seeing solid value growth

The data shows that nationwide property values in May rose moderately by 0.8% over the past three months to leave the national average value at $677,996.

Once adjusted for inflation, nationwide values increased by 5.8% year-on-year. This was down on the annual value increase of 6.4% seen in April.

In the country’s biggest market, the Auckland region, values increased by just 0.1% over the past quarter; leaving the region’s average value at $1,054,729.

Further evidence of the region’s static value growth can be seen in its 0.1% year-on-year drop in values, once they were adjusted for inflation.

QV general manager David Nagel says the usual winter slowdown meant sales were down but value levels are holding.

That’s because low interest rates, the loosening of the LVR restrictions and government kick-start packages continue to fuel demand, he says.

“Quarterly value growth across the Auckland and Wellington region has come virtually to a standstill.

“With a lower expectation of capital gains, particularly in Auckland, we’re seeing people show less urgency when it comes to selling or buying property."

Values growth across the other regional centres of Hamilton, Tauranga and Christchurch remains flat, Nagel says.

"Dunedin is the only main centre to buck the trend, where entry-level prices remain comparatively low and well-located properties continue to demand high prices.”

The data shows that values in Dunedin continue on an upward trend.

They went up by 4.0% over the past quarter and by 9.4% in the year to May, leaving the average city’s value at $408,827.

QV’s Dunedin spokesperson Aidan Young says the market is robust, with all property types selling reasonably quickly if priced right and multi-offer scenarios common-place.

“As we approach the usual winter slowdown period, I’d anticipate that the amount of property listings will drop.

“But, with demand showing no signs of dropping significantly, values should still steadily grow or at least hold their value.”

Meanwhile, QV’s data shows that growth in regional New Zealand is also continuing, with Napier, Hastings, Invercargill and Whangarei turning in particularly strong results.

Yet Nagel says that even these provincial towns are showing signs that the growth observed in the past few quarters will be difficult to maintain.

“With interest rates due to remain stable coupled with increasing costs faced by investors, I would anticipate the current trends will remain mostly the same over the coming months.

“Vendors will need to put extra focus on marketing their property effectively in a tighter market.”

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