Double digit lift for house prices last year

Prices for homes around the country rose 14% last year.

However, the pace of the lift slowed from a peak in November, as regulatory curbs imposed by the government and central bank took the steam out of the Auckland market, says state-owned valuer Quotable Value.

The average value of a New Zealand home rose to $558,146 in December from $488,674 a year earlier, accelerating from the 4.9% increase in 2014.

QV says values rose 2.9 % in the three months to December, slowing from the 4% pace in the previous three months.

Property values have been underpinned by a hot Auckland market in recent years, where rapid inbound migration and a shortage of supply has pushed up prices.

That prompted the government and the Reserve Bank to introduce new measures to quell the risk from a housing bubble. The central bank introduced Auckland-specific lending restrictions in November, while the government's more stringent enforcement of taxing speculators' capital gains began in October.

"With various government and Reserve Bank restrictions now beginning to take effect, and foreign buyers apparently much less active, our expectations are that Auckland values will drop by a few percent over the next few months," CoreLogic research director Jonno Ingerson says.

"While Auckland may take a breather, the surrounding areas are likely to rise, driven both by local demand and by Aucklanders choosing to live in affordable locations."

Massey University research yesterday showed New Zealand housing affordability improved slightly in the final three months of 2015, helped in part by stalling Auckland prices, though low interest rates were seen as potentially bidding up prices.

The QV data shows Auckland region values rose 4.1% in the three months to the end of December, for an annual gain of 22.5 %. At an average value of $933,264, Auckland values are almost 71% above the previous 2007 peak.

QV national spokeswoman Andrea Rush says the "massive increases" in Auckland values through the first nine months of the year were at a rate that hadn't been seen since the early 1990s, and encouraged investors to look outside the country's biggest city for potential purchases.

"This resulted in an increase in activity and demand in previously slow housing markets in upper and central North Island centres including Hamilton, Tauranga, the Waikato district, Hawke's Bay, Whangarei and Rotorua," she says.

Values in Hamilton rose 20% last year, while Tauranga was up 18%.

Wellington region values rose 5.1% in 2015, Christchurch city values increased 2.6%, and Dunedin values were up 5.7%.

(BusinessDesk)