Housing market: Value of average Kiwi home cracks $1 million for the first time - report

The average New Zealand home is now worth $1,002,153 - the first time values have cracked $1 million, a latest report shows.

Released on Wednesday, Quotable Value (QV) House Price Index figures show that for the three-month period ending in October, the average value of a home in New Zealand increased 5.3 percent, up from 3.6 percent quarterly growth recorded to the end of September.

The latest figures represent a 27 percent increase in values year-on-year, slightly higher than 26.3 percent recorded in September.

QV general manager David Nagel said the latest data showed buyers were still keen to commit to properties despite ongoing COVID-19 restrictions and uncertainty around economic recovery.

"Credit availability continues to tighten as banks respond to RBNZ concerns around property market stability, particularly with interest rates on the rise," QV general manager David Nagel said.

"But a continued lack of supply has resulted in a resurgence in prices across all 16 metro locations we monitor."

The three areas showing the strongest growth over the three months to October were Christchurch (10 percent), Queenstown Lakes (9.6 percent) and Tauranga City (6.6 percent). 

The area where figures show the lowest growth was Marlborough district (3.3 percent), followed by Palmerston North City (3.7 percent). 

Growth in the Garden City hits the double digits  

In Christchurch, the average property is now valued at $729,963, marking a 10 percent rise for the Garden City over the three months to October.  

Annual growth in the city has now hit 36.1 percent, led by growth in the eastern suburbs, followed by the peninsula and southern suburbs, QV said.

QV property consultant Olivia Brownie said low supply, high demand and still relatively low-interest rates were driving growth in the region.

Auckland values rise 5.6 percent

In Auckland, the average value is $1,427,896, up 5.6 percent over the three months to October. Quarterly growth, up from 2.6 percent in September, was strongest in Franklin, Papakura and Manukau, QV said.

Of the seven former Auckland territories, now combined to form the super city, at $963,651, only Franklin recorded an average value of less than $1 million.

Auckland registered valuer Hugh Robson said across all major catchments, growth was over 2 percent in October.

"Development sites are in hot demand right now, a lot of multi-unit townhouse developments are currently under construction, and auctions are regularly being brought forward," Robson said.

Although the super city remained in alert levels 4 and 3 since August 17, Robson noted restrictions hadn't appeared to slow the market.  

Manawatu/Whanganui region shows strongest annual growth

At 34.7 percent, the Manawatu/Whanganui region showed the strongest annual growth, just pipping the Canterbury region, at 34.1 percent.

Other regions where annual growth exceeded 30 percent were Hawkes Bay (33.9 percent) and the greater West Coast (32.7 percent).

Regions showing the lowest annual growth were Southland (20.4 percent), followed by the Tasman region (22.1 percent) and Otago (24.4 percent).

Reports on local activity

Reporting on values and activity within their local areas, QV property consultants in Waikato, Rotorua Wellington, Nelson, Dunedin and Invercargill commented on low supply and/or shortages of quality listings.

In Tauranga, property consultant Derek Turnwald reported an increase in requests for property appraisals. Amid alert level restrictions, there was "a noticeable drop off in interest" from investors in Auckland and Waikato, he said.

In Rotorua, property consultant Derek Turnwald said there was a sense "the market is peaking", most evident at the top end. There were "much fewer people attending auctions and open homes", he said.

This was also the case in Hawkes Bay, where QV valuer Damian Hall commented the market was "in something of a holding pattern", real estate agents reporting "the number of people attending open homes and auctions has declined."

In Wellington, QV consultant David Conford said although demand among first-home buyers was "steady", due to tightened lending restrictions many faced increased difficulties getting finance.

"Anecdotally we have heard that fewer offers are now being received and we are seeing more conditional offers are being accepted, a further sign that the market is slowing and may have peaked," Conford said.

Across North Island provincial centres, QV data over the three months to October showed the highest growth in Carterton at 10.4 percent.  Annually, price growth was strongest in Wairoa, at 37.8 percent.

Across the South Island, the centre with the highest quarterly and annual growth was Selwyn, at 13.9 percent (three months to October) and 39.7 percent (annual).

Quotable Value figures are based on a rolling three-month average of sales data and are an indication of changing property values rather than current sales.

Quoteable Value HPI - average value to October, 2021.
Quoteable Value HPI - average value to October, 2021. Photo credit: Supplied/QV.