A bird’s eye of Masterton. PHOTO/FILE
Continued growth in regional towns
Reports of the property market in the regions, including Wairarapa, outstripping the main centres are reinforced by the latest QV House Price Index.
Across provincial centres annual property value growth of 9 per cent outstripped growth in the main centres which was at one per cent, says Nick Goodall, head of research at CoreLogic, which provides data to QV.
Rural centres notched up an average value growth of 6 per cent over the year.
In Masterton, property values rose by 14.9 per cent annually to an average QV of $373,485, in Carterton they rose 15.1 per cent to $417,761 and in South Wairarapa they rose 12.5 per cent to $502,762, according to CoreLogic.
In contrast across the whole country the rise was 3.2 per cent.
This is changes in all property values, and today the Real Estate Institute of New Zealand will report trends in the latest property sales.
“The regions have continued the growth path during the last year mostly because affordability is better,” Goodall said.
He said the regions had not seen the same growth previously, but when credit tightened they benefited because houses were cheaper.
Regions close to main centres, like Wairarapa, also benefited from people being able to commute, he said.
QV general manager David Nagel says the loosening of loan-to-value ratio restrictions on January 1 should enable more first home buyers and investors to enter the market in coming months.
The restrictions limited how much people could borrow compared with a property’s value.
“Another point of interest is the continued growth in many smaller regional towns, particularly in the central and upper North Island,” Nagel said.
“Kawerau, Carterton, South Waikato and Ruapehu in particular continue to see strong quarterly growth figures on top of strong annual growth.”
Values dropped by 0.4 per cent in Auckland annually and the falls were bigger in parts of the city with the most expensive houses.
Values in the North Shore and Auckland City, where average property values are more than $1.2 million, dropped by 1.1 per cent and 1 per cent respectively but they rose 1.2 per
cent in Manukau.
Still, value growth in the provinces fluctuated around the country. The annual rate of growth increased in five, decreased in another five and stayed consistent in two, Goodall said.
“This helps show the variable patterns of similarly-sized areas and illustrates the need to understand a local market before investing in any property market,” he said.
He said that the property market in Australia is going through some tough times.
“But while we have the same banks operating here, regulation has been more stringent – which has led to a controlled slowing of the market, not a drop,” he said.
“In Auckland in particular, there’s still a deficit of supply from years of under-building, which is likely to guard against a significant drop in values, given still-strong population growth.
“Whereas in Australia there had been a lot of new building, causing an oversupply.”