Regions even hotter than Auckland housing market

(Getty)
(Getty)

The halo effect of Auckland's now million-dollar market continues to push house prices in the regions higher and higher.

Tauranga, Rotorua and Hamilton have all seen house value growth of nearly 30 percent in the past year according to the latest Quotable Value figures.

In fact the increase in these cities has been so significant, they may be creating a halo of their own.

House prices in Kawerau, Bay of Plenty, have doubled in the last 12 months, while values in the small Waikato town of Otorohanga have jumped 35.5 percent.

But the Reserve Bank's move to increase lending criteria to 40 percent equity appears to be cooling some markets.

Home values in Hamilton have increased a whopping 29.3 percent since August 2015. The average home value is now $518,387.

But the growth may have hit its peak. QV homevalue Hamilton valuer Stephen Hare says it appears demand for residential property has been easing.

"There are reports of a reduction in numbers of buyers attending open homes and auctions as well as a decrease in auction clearance rates, with more properties passing in or having no bids at auctions."

Mr Hare puts it down to commercial banks introducing the Reserve Bank's lending restrictions early.

"It appears that the new measures are already resulting in reduced competition for properties in the market, despite not formally coming into effect until October 1.

"It's likely that following this decrease in activity and demand we may start to see the rate of growth in home values across the city and region to start levelling out."

House values in Tauranga have also shown strong growth, with a 28.5 percent increase in the past year.

The average value in the city is now $633,638 while the average value across the district is $557,640.

QV has heard from brokers, lending institutions and real estate agents that the markets in Tauranga and western Bay of Plenty have already started to cool.

"It's unlikely the Bay of Plenty will see similar levels of growth in the coming year to that witnessed over the last 12 months," says valuer David Hume.

Newshub.

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