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Property values heat up in June quarter, driven by Auckland, Christchurch

New Zealand property values grew at a faster pace in the June quarter as the country's two biggest cities continued to underpin the market.

Values rose 2.1 percent in the three months ended June, accelerating from a 0.7 percent three-monthly pace in May, according to state valuer Quotable Value. On an annual basis, the pace of property value gains continued to slow, rising at an 8 percent annual pace in June, and compared to an 8.2 percent in May. Values are still 15 percent above the previous peak of late 2007.

"The nationwide index is still increasing but the picture around the country is mixed," Andrea Rush, QV's national spokeswoman said in a statement. "Residential property values in Auckland and Christchurch are still increasing at a similar rate to what they were last June."

The Reserve Bank introduced loan-to-value mortgage lending restrictions on Oct. 1 last year on concern rapidly accelerating house prices in Auckland and Christchurch may lead to an asset bubble and cause financial instability. Property value growth had slowed earlier this year, and the central bank has hiked interest rates three times to cool the economy as inflation accelerates.

Today's figures showed the Auckland market increased by 12.3 percent year-on-year and values are up 31.4 percent since 2007. Values rose 2.7 percent in the past three months. Manukau East was the strongest performing part of Auckland, clocking up a 4.3 percent rise in the past three months. Waitakere values rose 2.3 percent.

Values in Wellington decreased 0.4 percent in the past three months, with the western suburbs falling 2.5 percent in the past three months.

Property values in Christchurch have increased 2.5 percent in the past three months and 7 percent year-on-year and are 21.1 percent above the peak of 2007. The Selwyn and southwest parts of the district are performing the best. Liquefaction was a problem on the eastern side of the city when earthquakes struck.

(BusinessDesk)

Comments and questions
4

Dec,13 NZ was found to be the third most over valued property market
in the world, to-day we are told "values heat up in june qtr"

the long term damage this will do to the next generation, the majority
of which will retire in poverty, Korea the most undervalued market
will grow from strength to strength, OZ and UK are going down the
same suicidal route as NZ

Greed drives stupidity. Navel gazing punters forget that there's over 100 years of data to gauge the current climate. Take into account that the last 5 years of mortgage rates are a historical anomaly and that the RBNZ are in an 'adjustment period' and it makes for some worrying scenarios. Unfortunately when the majority have a vested interest no one wants to believe that the emperor has no clothes.

The reality is Auckland housing market is cooling fast.
QV data is based on settlement dates which are between 4-8 weeks behind the sale date. The market has changed over the last few months and QV data is not recognising this.
Wait for REINZ data released this month which is based on data collected at the time of sale - this will be more up to date.
Ps. Obviously the LVR are skewing the data as well....low end can't but which pushes up median and average.

Totally correct. You strip out the lower end of the market and the median skews upwards. Sale prices vs GVs show market has cooled significantly. Also, if you look closely, we may just be up on June last year but definitely not up on Aug/Sep last year. There are 11 months between June last year and this year.