The latest QV House Price Index details key factor behind this slowdown
Affordability constraints have put the brakes on national value growth, particularly in high-value regions, according to the latest QV House Price Index. The average value is now at $686,523, up by 0.5% in the three months ending in March but down from 7.3% to 2.6% year-on-year.
Out of all the main centres, Dunedin continues to see the strongest value growth (up by 13.3% year-on-year to $451,199), while steady growth continues in Wellington (up 8.4% year-on-year to $702,896) and values drop slightly in Auckland (down by 1.1% year-on-year to $1,230,817).
“Our latest figures show that value growth continues to slow overall,” QV general manager David Nagel said. “Affordability constraints are a key factor behind this slowdown, particularly in areas such as Auckland City which has an average value of $1,230,817.”
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He also mentioned Rotorua (up 7.0% to$472,566) and the Hawkes Bay as having the strongest value growth, adding that Rotorua appears to be attracting buyers possibly priced out of the nearby Tauranga and Auckland markets. He noted an increased demand for different types of housing, such as low maintenance, architecturally designed townhouses in Wellington.
“We’re anticipating more of the same over the coming months,” Nagel said. “The Tax Working Group’s recommended Capital Gains Tax shouldn’t impact investor activity substantially in the short term although this might change in the months leading to its likely implementation date in April 2021.
“We may see an increase in buyer demand, following the Reserve Bank’s indication that a cut to the Official Cash Rate (OCR) is likely. This scenario is anticipated to keep interest rates low, which in turn may increase demand for residential property across New Zealand,” he added.
