No loss in momentum in region’s housing market
The rate of annual growth in property values is holding in Wairarapa and Tararua while it sinks in Auckland.
Quotable Value statistics for April show 20.1 per cent annual growth in Tararua, 12.2 per cent in Masterton, 12.3 per cent in Carterton and 8 per cent in South Wairarapa.
In March, the annual growth rates were 21.7 per cent in Tararua, 12.3 per cent in Masterton, 11.6 per cent in Carterton and 6.7 per cent in South Wairarapa.
Nationwide, the CoreLogic QV House Price Index for April rose 2.7 per cent during the past year. This is a minor improvement on the 2.6 per cent in March but the improvement was 7.6 per cent a year ago.
QV general manager, David Nagel, said while the rate of national value growth was slow year-on-year, “our more affordable regions continue to attract plenty of buyer demand resulting in solid value growth”.
Dwelling values were tracking 8.2 per cent higher during the year across the combined 13 provincial centres.
Separately, the realestate.co.nz website put out an April property report that showed the average asking price in the Wairarapa region had increased by 4.3 per cent to $483,491 and the number of new listings were up by 11.7 per cent to 105 on a year ago.
And Property Brokers predicted the boom in the regions will continue.
The real estate firm said 500 of the 3400 properties sold in the North Island in 2018 were to buyers from Auckland or Wellington, who were either relocating or investing in the regions.
This was good news for the housing market in the regions because it indicated the Auckland-centric nature of New Zealand’s property market continued to change, Property Brokers said.
“Auckland is no longer seen as the only place to make money in the residential housing market. People are seeing that there are good deals in the regions.”
Property Brokers also said the raft of compliance changes and legislation regarding rental properties was causing investors to sell and they were being picked up by first home buyers.
“For us at Property Brokers, we are seeing good results in many of our provincial markets, especially Manawatu, Wanganui, Horowhenua, Wairarapa and Hawke’s Bay.
“Demand is strong and we are also finding that volume is increasing, which is interesting because if you look at recent Real Estate Institute of New Zealand data, overall volume is dropping.”
Quotable Value said the stronger city markets of Wellington and Dunedin showed some signs of a loss in momentum in April, however they still remained the best performing main centres.
QV Wellington senior consultant David Cornford said there continued to be under supply of property in the Wellington region and for this reason it remained a sellers’ market.
“As we move closer to winter, we are likely to see the usual winter slowdown in sales activity.
“Finally, townhouse developments continue to sell well and are in high demand.”
Head of research at CoreLogic, Nick Goodall, said with the relative shock of the government completely ruling out a more comprehensive capital gains tax in April, attention now shifted to the Reserve Bank and its official cash rate announcement and monetary policy statement release on May 8.
“Market expectation is for a reduction in the OCR to 1.5 per cent, which would be supportive of the property market at a time when banks are already competing fiercely for mortgage market share, via low interest rates.”
He said there was relief at the ruling out of a tax change for residential investment property but property investors were already dealing with several changes impacting their profits, including the tax ring-fence proposal advancing through Parliament, increased heating and insulation standards via the Healthy Homes Guarantees Act and limited wage growth restraining their ability to increase rents in line with their costs.
House values [as at April 30, 2019]
Area Average value Annual change
New Zealand $686,975 +2.7%
Tararua District $230,915 +20.1%
Masterton District $380,864 +12.2%
Carterton District $434,387 +12.3%
South Wairarapa District $511,664 +8%