Invercargill house values go up in flat national market
The average value of a house in Invercargill has risen by 3.2% in the April quarter, well above a national rise of 0.1%, a report has found.
The Quotable Value House Price Index report for April found that the average capital value had increased to $481,973 in the southern city.
Capital value is a value assigned to a house for rating purposes, but does not reflect the current market value of the house.
QV registered valuer Andrew Ronald said home capital values in the city had increased by an average of 5.9% in the 12 months to the end of April 2024.
They had increased for three months in a row, and there was “healthy demand from first-home buyers and investors”.
“However, continued high interest rates appear to be limiting price growth.”
Ronald said Invercargill’s home capital value had peaked in March 2022 at $498,473.
According to the QV report, Invercargill was second only to Rotorua district, where the value of houses had gone up by 3.6% to $683,415, and was followed by Dunedin city, up 2.1% to a value of $646,668.
Bayleys licensed real estate agent Graeme Hegan said he agreed with the increase found by the report, but was surprised that it was only 3.2%, because the median house price had also increased in the city.
“It’s the price brackets on properties that are selling. The value of them has not increased dramatically, but the number of them selling has increased,” he said.
“Southland is a conservative economy built on real money, not borrowed money or not as much borrowed money. So it doesn’t get the dramatic highs and lows – it’s a more substantial market.”
The median price of a house in Invercargill was now at $475,000, according to Hegan.
Bayleys licensed real estate agent Joanne Hegan said there was a mix of reasons behind this, including more people moving to Southland.
Hegan said it wasn’t just one type of buyer, but a “flush of investors”, including first time buyers, and this meant sellers were not dependent on a single type of buyer.
“We’ve got a shortage of stock in the $700,000 price range, [but] we’ve got quite a range of [homes from] $500,000 to $600,000 available. We're not seeing huge numbers, but we’re probably seeing quality rather than quantity at our open homes and inquiry.”
Mike Pero brand and territory owner Sheree Williams said while she had seen an increase in house prices, there were houses that had been listed but weren’t selling.
She attributed this to the price of the house and when the owner bought the property, adding that she thought the market was really strong.
“There are a lot of unrealistic sellers out there, and there are many realistic sellers [as well].”
Houses had gone up but also down in value, and owners needed to understand that, Williams said.
She attributed education and awareness among buyers to the house price increase.
The awareness had also contributed to a wider demographic of people purchasing a house, Williams said.