The New Zealand main centres that are more affordable, particularly Dunedin and Wellington, continue to show strong growth in house prices in a cooling market, says state-owned valuations agency QV.
The latest QV House Price Index shows nationwide residential property values have increased by 3.5 per cent over the last year and by 1.3 per cent in the three months to November. The nationwide average value is now $681,545.
QV says Dunedin, with a relatively affordable entry-level price coupled with attractive premium areas, continues to appeal to a variety of buyers, leading to strong quarterly growth of 3.8 per cent. Dunedin values increased 11.7 per cent in the year to November.
The wider Wellington region, with quarterly growth of four per cent, is still seeing values steadily increase as buyers continue to be attracted to the more affordable outer city areas such as Porirua and the Hutt Valley. Wellington Region values rose 8.1 per cent in the year to November.
At the same time, the "top-end" of the market - those areas with average values above one million such as the Queenstown Lakes - are generally experiencing a cool down in market activity and growth, QV says.
Values across the Auckland region increased by 0.4 per cent year on year and by 0.1 per cent over the past quarter. The average value for the Auckland Region is now $1,050,647.
Value growth remains slow across Auckland's suburbs, the agency says. North Shore values rose 0.1 per cent over the past three months, and the former Auckland City Council central suburbs dropped by 0.1 per cent over the quarter.
"Our latest insight reflects what we're seeing and hearing in the market; there is still plenty of activity taking place following the 'spring surge' in activity although value growth is fairly modest overall," QV General Manager, David Nagel said,
"Dunedin and the wider Wellington region continue to lead the way, where value growth remains strong. These regions appeal to a broad range of buyers, particularly first home buyers and investors, due to their relative affordability and higher yields on offer. These factors enable the values in these regions to continue their upward trend, even in a cooling market," he said.
"The recently announced loosening of the LVR restrictions should inject energy into the market although I wouldn't anticipate its impact will be overly significant.
"In the big scheme of things, it's still a relatively minor change although it may result in new first home buyers and investors entering the market in the New Year, which could drive further value growth."
Mr Nagel said QV is expecting more of the same throughout summer.
"The warmer months should continue to keep listings at a healthy level although the busy Christmas period may reduce activity slightly as people hold of selling until things quieten down in January and February," he said.