Wellington Scoop

Average home value in Wgtn now $1.2m, up 24% in 12 months

News from Quotable Value New Zealand
Rising interest rates, combined with further tightening of credit availability, appear to be dampening the enthusiasm of investors and first home buyers. While house values continue to rise, what lies beneath QV’s latest figures is growing evidence that price pressure has shifted from the lower valued properties popular with investors and first home buyers, onto the higher valued housing stock where buyers are less impacted by credit availability and affordability constraints.

Residential property values increased across the greater Wellington region by an average of 4.2% this spring.

In the 12 months to the end of November, home values have grown by an average of 28.9%, with the Kapiti Coast (35.5%), Hutt City (34.6%), and Upper Hutt (31.3%) all recording annual growth exceeding 30%. Porirua isn’t far behind on 27.9%.

The average value of a home in Wellington City is now $1,238,970, which is 24.7% higher than the same time last year. The city’s northern suburbs have experienced the most growth this quarter (6.5%) and annually (34.4%).

Despite all this value growth, QV senior consultant Blake Ngarimu said open-home attendance had dropped off “a little” in recent months. “The recent lifting of interest rates and tightening of lending has resulted in many buyers struggling to obtain finance,” he said.

“The upper end of the market remains strong across the Wellington region and continues to exceed expectations. Newly constructed dwellings in the outer suburbs approach the $2 million mark and a large Eastbourne Bays home recently sold for more than $4,500,000 after only a few weeks on the market.”

“There will be fewer properties coming to the market from now until after the Christmas-New Year break. The first few months of next year will provide a better indication of where the market will be heading in 2022,” he added.

The average home value increased 6.9% nationally over the past three-month period to the end of November, up from the 5.3% quarterly growth we saw in October, with the national average value now sitting at $1,029,820. This represents an increase of 28.4% year-on-year, up from the figure of 27% we reported last month.

In the Auckland region, the average value now sits at $1,482,005, climbing 8.3% over the last three-month period, with annual growth of 27.9% even higher than October’s year-on-year growth of 24.8%.

QV general manager David Nagel commented: “While the November numbers look extremely bullish there are growing signs that this property growth cycle is starting to transition. Real estate agents are reporting a significant upswing in listings, while open home attendance rates are falling. Some properties are being passed in at auctions, which was unheard of a few months ago. This isn’t a surprise given rising interest rates, changes to LVRs last month and now a further tightening of credit rules from December. This has taken a number of buyers out of the market, just as stock numbers are starting to increase, which is resetting the supply demand equilibrium.”

“A dozen of the 16 major urban areas we monitor have still recorded an increase in the rate of growth for the QV three-monthly house price index. But this is more a result of price pressure at the top end of the market, which generally has a different type of buyer, with less credit restrictions or affordability constraints,” he said.

“We’ve broken the market down into quartiles to better understand which properties are showing the biggest increases in value. In almost all cases the greatest price increases were occurring in the top 25% of properties by value. In many cases, this was significant. Take Palmerston North, for example, which has experienced massive price growth this year, but is now down to just 2.7% three-monthly growth overall. But the top 25% of properties are showing 6.3% value growth. In Dunedin, one of the hottest markets earlier in the year, values have grown by 4.3% over the past three months, but the top 25% of properties are showing value growth of 9.6% over the same time. This indicates a change from what we were seeing previously,” he added.

The strongest overall three-monthly value gains for the main cities have come from Christchurch at 12.7% growth in value, up from 10% value growth last month, followed by Queenstown Lakes District at 11.7% growth, building further on the strong three-monthly rate of growth of 9.6% we reported last month.

None of the 16 major urban areas QV monitors have seen a decline in average value, with all but Palmerston North (2.7%), Napier (3.7%), Nelson (4.9%) and Invercargill (4.3%), showing an increase in the rate of three-monthly growth since last month.

The Canterbury region has experienced the strongest annual value growth with 36.2% growth over the past year, followed by the Hawke’s Bay region at 33.9%, while the Taranaki and Manawatu-Whanganui districts have both experienced annual growth of 33.2%.

The three lowest annual growth rates are all in the South Island, with the Southland region experiencing a still-significant 20.3% increase, the Tasman region recording 22.6% growth, and Otago at 23.7% annual growth.


Content Sourced from scoop.co.nz
Original url

1 comment:

  1. M, 12. December 2021, 9:44

    Come on Q.V. Give us the next level of stats.
    The $4.5m house would have substantially increased the average house price. Let’s break it down .. under 500k, then 500k to 1m etc.
    How about the percentage of businesses versus people buying houses. After all those businesses are paying way more than families. How about what the property sold for, then how many houses and apartments were built on that site and what those new properties sold for? How many new houses for the year to date? Look forward to seeing the next level of detail.