Major urban centres continue to show strong gains
The property market in New Zealand continues to sizzle in the summer, with the national average value increasing from 5.35% in the December quarter to 6.27% over the past three months, according to Quotable Value (QV).
The latest QV House Price Index showed that the average value now sits at $838,826, an increase of 15.11% year-on-year.
QV general manager David Nagel said the major urban centres continued to show strong value gains over the past three months, with Tauranga and Palmerston North leading the way with 10.46% and 9.19% growth, respectively.
“The larger centres were generally first to show the rapid value growth, and this was primarily driven by both first-home buyers and investors competing for the very limited supply of entry-level housing stock. But the market strength has now spread to the higher value locations in the major centres as confidence returns in the post-lockdown economic recovery,” Nagel said.
“The rapid and sustained residential value growth has compounded affordability problems, making it difficult for first-home buyers to put together a deposit in the bigger cities. This appears to be the main impediment for first-home buyers entering the market.”
Nagel expects a gradual cooling of the market in the second half of the year as loan-to-value ratio (LVR) restrictions return in March.
“But with the long-term forecast for housing demand in New Zealand looking positive, it is difficult to see the market take a significant turn for the worse any time soon,” Nagel concluded.
