House values in deep South rise consistently
REGIONAL areas including Otago and Southland continue to deliver strong yearonyear gains in house values as opposed to many other towns and cities.
Quotable Value general manager David Nagel said nationwide values in April continued to rise at a ‘‘moderate pace’’ with many regional centres continuing to see steady increases, but the rate of growth continued to slow, plateau or even drop slightly in some main centres.
‘‘This is partly due to the continued trend of people seeking a lifestyle change away from the cities and purchasing better valued properties in the regions.
‘‘Particularly those that are within commutable distances of major centres,’’ Mr Nagel said in a statement.
While annual value growth remained flat in Christchurch, down 0.5%, Mr Nagel said the Hamilton, Tauranga and Dunedin markets had continued to rise moderately.
He said the deep South continued to see consistent value increases in most regions, particularly Invercargill and Central Otago, which was up 12.4% on a year ago, and Queenstown Lakes, up 8.5%.
Elsewhere in the South Island, Waitaki had the greatest annual value increase, up 13.8%, while Gore experienced the highest quarterly increase in the regions, up 4.2%, he said.
Despite home values remaining high, firsthome buyer activity was increasing, particularly in Wellington and Dunedin, as people took advantage of using KiwiSaver funds as deposits.
Dunedin values continued their upward trend, up 8.8% in the year to April and 3.1% over the past three months.
QV Dunedin property consultant Aidan Young said while the city market had slowed, values remained stable overall.
‘‘The amount of people attending open homes has dropped, although there’s still plenty of activity from firsthome buyers who are snapping up well
maintained, entry level properties up to the $400,000 HomeStart grant cap,’’ Mr Young said in a statement.
Dunedin continued to provide a lower entry point when compared with many other parts of New Zealand, he said.
Internal migration between southern districts including Clutha, Central Otago and Southland had been noted as people sought the best value properties.
Vacant land remained in short supply around Dunedin given that some of the larger subdivisions were nearing their final stages, particularly in Mosgiel, and there was anecdotal evidence that $300,000 sections were ‘‘being met with some resistance by the market’’, he said.
‘‘There is more supply in the
pipeline, however, there may be some time until titles are available and purchasers are able to build,’’ he said.
Mr Young predicted house price growth would remain ‘‘relatively stable’’ over coming months as winter was the typical slowdown period for Dunedin.
Mr Nagel said the higher proportion of firsthome buyer activity, as seen in Dunedin and Wellington, was largely due to rising rents.
That meant it could often be as affordable to purchase an entry level home and pay a mortgage, as it was to rent a home.
‘‘However, for many, raising a deposit is still a bridge too far to cross to be able to gain entry into the housing market,’’ Mr Nagel said.