Nationwide house prices are holding firm despite a winter slowdown in sales, but growth in Auckland and Wellington is at a virtual standstill.
The latest monthly QV House Price Index shows nationwide residential property values in May were up 6.9 per cent on a year earlier. When adjusted for inflation, the nationwide annual increase was 5.8 per cent.
Values rose 0.8 per cent over the past three months and the national average value is now $677,996.
QV's David Nagel speaks about house price growth stalls in Auckland and Wellington. (Source: Other)
"As anticipated, nationwide sales volumes are down as we enter the usual winter slowdown although value levels are holding. This is typical of this time of year, as many people put off selling their property until the warmer months," said QV General Manager David Nagel.
"Values remain relatively high, as low interest rates, the loosening of the LVR restrictions and the government kick-start packages, such as the KiwiSaver HomeStart grant and savings withdrawal, continue to fuel demand," he said.
Meanwhile, residential value growth across the Auckland Region increased by just 1.0 per cent year on year, but when adjusted for inflation, dropped 0.1 per cent. Auckland values rose by 0.1 per cent over the past quarter and the average value for the Auckland Region is now $1,054,729.
Values across the Wellington Region rose 4.3 per cent in the year to May although dropped 1.1 per cent over the past quarter and the average value is now $633,759.
"Quarterly value growth across the Auckland and Wellington region has come virtually to a standstill. With a lower expectation of capital gains, particularly in Auckland, we're seeing people show less urgency when it comes to selling or buying property," Mr Nagel said.
“I would anticipate the current trends will remain mostly the same over the coming months
"Dunedin is the only main centre to buck the trend, where entry-level prices remain comparatively low and well-located properties continue to demand high prices. Values growth across the other regional centres of Hamilton, Tauranga and Christchurch remains flat."
Values in Dunedin increased 9.4 per cent in the year to May and 4.0 per cent over the past three months.
Hamilton values rose 1.0 per cent over the past three months and 3.1 per cent in the year to May.
Tauranga values were up 2.6 per cent year on year but dropped 0.9 per cent over the past three months.
Christchurch values remained flat year on year and increased slightly by 0.1 per cent over the past three months.
"We're still seeing growth in regional New Zealand where values levels were initially slower to take off. But even these provincial towns are showing signs that the growth we've observed in the past few quarters will be difficult to maintain," Mr Nagel said.
"First Home Buyer activity continues to grow across the country, having been on the up for the past few years, he said.
This is particularly evident in the wider Wellington region, where the Hutt Valley and Porirua City are seeing high numbers of buyers in this category.
"With interest rates due to remain stable coupled with increasing costs faced by investors, I would anticipate the current trends will remain mostly the same over the coming months and vendors will need to put extra focus on marketing their property effectively in a tighter market," Mr Nagel said.
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