Continued shortage of listings and record low interest rates have provided some uplift to the market
Quotable Value (QV)’s latest report has shown positive movement in the property market, as seen in the rise of values.
QV’s latest House Price Index has revealed a 3.3% increase on the average national value year-on-year to $704,072 in November – proving that the annual growth rate is picking up the pace.
The average value increased 2.2% over the last three months to November, up from only a 1.4% increase in October. The Auckland market also saw some positive movement – including a 1.3% increase in its average value over the past three months.
Paul McCorry, spokesperson for QV, said continuous shortage of listings and record low interest rates have provided some uplift to the market.
“All of the main centres are showing value growth over the past three months, including Auckland and Christchurch which have generally struggled throughout most of 2019,” McCorry said, as reported by Landlords.co.nz.
Read more: QV warns about possible late spring surge
The Reserve Bank of New Zealand (RBNZ)’s decision to keep the official cash rate (OCR) at current level has also been brought to light, with QV predicting that the decision has not stopped the resurgence in value growth continuing as the market heads into summer.
“The next OCR announcement is not until March next year but the market will be more interested in the Reserve Bank’s upcoming announcement on banks’ capital requirement rules. That could also have flow on effects to borrowers,” McCorry said.
Meanwhile, economists have been expecting life returning in the market next year. Kelvin Davidson, senior property economist at CoreLogic, for example, expects a busier market in 2020.
“But we’re unlikely to see a massive surge in sales and prices. It’s more likely to be a moderate rise. So say there was 75,000 sales nationally this year; next year there might be 77,000 to 78,000,” he clarified. “And, in terms of prices, nationally prices are up by about 3% this year. But, in 2020, we’re likely to price growth of around 5%. So we will see growth, but I don’t see the market surging away again.”
Jarrod Kerr, chief economist at Kiwibank, added: “I’d anticipate 4-5% growth nationally, with 3-4% growth in the Auckland region. Depending on the region, there could continue to be double digit growth as people move away from Auckland.”
