close
MENU
1 mins to read

NZ home values rise at slowest annual pace in six months in November

The average value of a New Zealand home rose 12% to $624,675 in November from a year earlier, the weakest annual growth rate since May, according to state-owned valuer Quotable Value.

Tina Morrison
Thu, 01 Dec 2016

New Zealand residential property values increased at the slowest annual pace in six months in November, as tougher lending restrictions constrain buyers.

The average value of a New Zealand home rose 12% to $624,675 in November from a year earlier, the weakest annual growth rate since May, according to state-owned valuer Quotable Value.

New Zealand's housing market has been on a tear, bolstered by record migration and low interest rates, prompting the Reserve Bank to tighten up lending rules to reduce the risk to household balance sheets. It added new restrictions on lending to property investors with high loan-to-value ratios (LVRs) on October 1 and Reserve Bank governor Graeme Wheeler noted yesterday that new tools such as debt-to-income (DTI) lending restrictions weren't needed at this stage as house price inflation had moderated.

"The latest round of LVR restrictions have led to a weaker-than-normal spring as a reduction in demand for investor housing stock has resulted in more subdued value growth," QV's national spokeswoman Andrea Rush said.

Growth in Auckland house values increased at a 13% annual pace in November, the slowest rate since January 2015, taking the average value for the Auckland region to $1.05 million. The rate of growth in Auckland peaked at 24.4% in November last year and has since slowed following the introduction of the tighter lending rules.

Wellington regional house values increased 21% to $565,631, although QV noted the market was slightly less buoyant as LVRs take effect. QV noted some sales had stalled during settlements as insurers refused to roll over cover to the new buyer, pending a building report, following the Kaikoura earthquake on November 14.

In other urban centres, Hamilton values jumped 23% to $536,565, Tauranga rose 27% to $665,155, Dunedin lifted 11% to $341,604, and Christchurch edged up 4.3% to $501,229.

Napier values gained 21% to $408,509, Hastings increased 18% to $375,175, and Nelson advanced 15% to $489,338.

In the North Island, all areas posted an increase in residential property values over the past year.

In the South Island, the stand-out performer was the Queenstown Lakes District where values increased 32% to top $1 million. The Grey District was the only place to see values decrease over the past year, posting a 2.1% decline to $207,837.

(BusinessDesk)

Tina Morrison
Thu, 01 Dec 2016
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
NZ home values rise at slowest annual pace in six months in November
63551
false