Press Release – QV Valuations
Residential property values across the Wellington area have continued their slow increase, up 2.9% over the past year. Lower Hutt has seen the highest increase of the area by far, now up 5.1%. In contrast, Porirua is up 1.7%, Upper Hutt 2.4% and Wellington City 2.5%.
Over the past three months, Porirua and Wellington City Central and South have both seen slight decreases, with all other areas remaining pretty static. Lower Hutt again has seen the most growth at 2.2%.
QV Valuer Pieter Geill said “The market in Wellington remains relatively quiet, with steady demand coming from first home buyers. Generally, we have seen these buyers looking for properties that don’t require a lot of work and are purchasing in more affordable areas such as Wainuiomata.”
The latest QV monthly property value index shows that nationwide residential values for September have increased 8.4% over the past year, and 2.6% over the past three months, and so are now 9.2% above the previous market peak of late 2007. When adjusted for inflation, the nationwide annual increase drops a little to 7.7% and values remain below the 2007 peak by 4.9%.
The Auckland market has increased 13.6% year on year and values are 21.3% above the previous peak. When adjusted for inflation values are up 12.9% over the past year and are only 5.6% above the 2007 peak.
Jonno Ingerson, QV.co.nz Research Director said “Nationwide values continue to rise, driven primarily by Auckland and Canterbury where high demand and short supply are pushing prices up. Most of the rest of the main cities and provincial towns are also increasing but at a much more modest rate. ”
“The LVR caps just applied by the Reserve Bank are intended to help slow down the rapid increase in values by limiting loans to people with a low deposit. This will take some time to fully impact the market as the main banks had a large number of pre approved loan applications in the pipeline. This is likely to cause a short term flurry in activity as people rush to secure a property before their pre approval expires.”
“While the LVR caps may have an impact on first home buyers with limited deposits, it is likely to have little impact on other buyers. What remains to be seen is whether the overall activity and price levels in the market are affected, particularly in areas with more affordable properties.”