NZ property market continues to strengthen

Major cities saw quarterly price growth for the third consecutive month

NZ property market continues to strengthen

New Zealand’s property market is on a roll as house prices continue to increase, according to Quotable Value (QV)’s latest report.

The QV House Price Index revealed that house prices jumped 5.3% year-on-year in February and 2.6% over the quarter. All 16 major cities saw quarterly price growth for the third consecutive month, with the national average residential property value reaching $722,475.

David Nagel, general manager at QV, said Auckland’s market is going stronger again after being relatively quiet for two to three years.

“Sales activity has picked up significantly in Auckland and in a majority of the country as more buyers commit to property decisions in an already congested market. As a result, we're seeing more buyers from across the property spectrum competing for limited stock – forcing prices to rise,” Nagel said, as reported by Stuff.co.nz. “This pattern is likely to continue as we enter autumn – where the summer rush of property listings typically drops off, and an already tight market gets even more tightly held.”

Read more: Report reveals rise in residential property values in the majority of NZ

Whanganui District had the best annual performance, with its prices having increased by 30% compared to the previous year. Gisborne followed it with a 24.9% increase then Invercargill with 19.3%. Meanwhile, Queenstown and North Shore reported the slowest annual growth in value.

Rupert Yortt, senior consultant at QV, said “typically undesirable properties” in South Auckland have turned popular recently as first-home buyers became more active in lower-value areas.

Nagel added: “Apprehension around Covid-9 and its impact on the economy remain unlikely to be felt in the property market in the short term. However, it could have an impact in the months ahead. Tourism-dependent locations are likely to be first to feel the pinch.”

“If we see a reduction in the official cash rate by the Reserve Bank in response to the Covid-19 outbreak, then this could stimulate the property market further in the short term, depending on the extent of interest rate reductions that are passed on to borrowers.”

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