Property values ‘interesting’
Real estate sales in 2017 a mixed bag, writes Helen Mays.
If 2017 has left you dazed and confused about real estate prices, you’re not alone. The latest QV media release shows it was an interesting year for residential property values.
LVR speed limits, stricter retail bank lending criteria and speed wobbles before the election, plus rapid value increases in some areas and decreasing values in others made 2017 rather a slow year in real estate. Although overall the nationwide average saw property values increase by 6.6 per cent over 2016, the last three months of 2017 saw national averages increasing just 3.6 per cent.
Looking at the figures over the last decade explains why some homeowners were able to also become property investors. They became landlords for the first time, buying a second investment property with their home equity, while existing landlords became more enthusiastic property investors, buying additional properties for their portfolios.
For those who live in Auckland, the gains in 10 years have set many people free to explore more sedate and user friendly parts of the country. Auckland property values have gone up by 92.5 per cent in the last 10 years and excited property owners were venturing north and south with their investment gains. They were ‘‘The Aucklanders’’ turning up at our open homes locally, some anecdotally driving to Palmerston North for a quick trip and an instant offer on a property they saw as a real bargain and a great rental. Others were buying with the intention of eventually moving here, banking the excess from their Auckland property sale and living a more relaxed lifestyle. These Aucklanders were also sending prices up in places like Napier, where the average house price is now $477,959, a 40.5 per cent increase over the last 10 years.
Whakatane property has gained 19 per cent, Hastings 42.8 per cent and New Plymouth prices have risen 32.1 per cent in a decade. Down south the figures are equally suprising, with Queenstown Lakes rising 61.7 per cent, Dunedin 36 per cent and Southland 18 per cent.
Manawatu¯ has been bubbling along also at a 27.9 per cent rise in house prices, with Palmerston North appreciating a 25.8 per cent rise. The average house price in Manawatu¯ in 2017 was $325,330 and $375,217 in Palmerston North.
A steady rise in house prices was a bonus for those who wanted to sell, with busy open homes and multiple offers becoming the norm, but those who did take the plunge and sell without knowing where they were moving to risked not being able to find a new property to transition smoothly into. A shortage of property listings in Palmerston North especially caused considerable angst, with agents wringing their hands over a shortage of listings. Some people were afraid to sell and stayed put, preferring to renovate and build on to an exisiting dwelling in fear of not being able to buy again quickly in the same market.
Those who did take the plunge and capture a good price for their home quickly were those taking the opportunity to build a brand new home. They filled the self-storage options around the city, putting their excess household goods away while they rented, pending a new home build. Housebuilding in Palmerston North could have been even more prolific except for a severe shortage of sections available.
As for the conclusion of 2017 with an election, property valuer Jason Hockley suggests it didn’t really matter much which politically led government formed in 2017. ‘‘The facts are both sides were promising more money in the hands of Kiwis. As a result my prediction is much of this extra money is likely to be funnelled into the housing markets through increased rents and homeowners with more disposable incomes to be even more competitive in buying.’’
Jason adds the Labour led government has optimistically promised more houses. ‘‘As yet we have seen very little solutions as to how this will occur. Therefore there is strong chance of a fairly positive market into the foreseeable future.’’