QV is pointing to LVR speed limits, stricter retail bank lending criteria and uncertainty ahead of the election as the reason for 2017’s overall slowing residential property values.
But it says it also saw periods of rapid value increases in some areas and decreasing values in others.
Overall the nationwide average shows residential property values increased +6.6% or +$41,660 during 2017 from $627,905 in December 2016 to $669,565 in December 2017, according to the latest QV House Price Index statistics. The average national value increased +3.6% over the final three months of 2017.
These value increases were higher than in recent months.
Sales volumes were down on 2016 for every month during the year and between February and October they were in excess of 20% below 2016 levels before picking up in November when a post-election late spring bump saw them jump to just 10% lower than November 2016 levels.
QV National Spokesperson, Andrea Rush said “Potential housing policy changes in the lead up to the election also caused uncertainty and people took a wait and see approach causing activity to slow dramatically over the winter quarter and this resulted in value decreases in many areas.”
“The usual annual spring surge was very slow to arrive and listing levels and market activity did not pick up until November and December and this can be seen in both sales volumes and value growth recovering in the last two months of the year.”
They are now saying the slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity and demand in housing the market as we move through the summer months.
And they expect residential property values to hold for the most part during 2018 “but the trend of lower rates of growth is likely to continue.” This is because low interest rates, relatively high net migration and lack of supply will mean core market drivers remain for the main centres
“However, areas where investors were previously very active may continue to see values drop back where prices remain too high for first home buyers particularly in Auckland, Hamilton and surrounding districts,” says Rush. “Some regional areas may continue to see stronger value growth than the main centres during the year.”
Main centre overview:
Of the main centres Porirua city, Napier, Hastings and Whanganui saw the greatest percentage growth during the year.
The average value across the wider Auckland region increased 0.4% or $4,583 from $1,047,179 at December 2016 to $1,051,762 at December 2017. Values rose 1.2% over the past three months.
Annual growth ticked up again across the Auckland region in the final quarter of 2017 with most areas seeing values rising again. The former Auckland City Council central suburbs saw values rise 2.2% in the year to December and 1.6% over the final quarter of the year with Auckland City – East continuing to rise above average for the region, up 3.6% year on year and 2.8% over the past three months, the average value there is now $1,575,133. Strong value growth also continues for Auckland City – Islands with the Waiheke Island market driving growth up 13.7% in the year to December and 6.6% over the final quarter of the year.
North Shore values also ticked up again rising 0.7% in year on year and 2.6% over the final three months of the year. Waitakere values also rose 1.0% over the final three months of 2017 although values were down 1.9% in the year since December 2016.
Meanwhile, values are also increasing again in both Rodney and Franklin and particularly in Papakura which rose 2.2% year on year and 2.6% over the final three months of the year. Manukau bucked the general trend as values there dropped 1.0% year on year and 0.3% over the past three months.