NZ house values rise at fastest pace in nine years

New Zealand home values rose at their fastest annual pace in more than nine years in November, although there are some signs the pace of growth may be slowing in the overheated Auckland market.

The average value of a New Zealand home jumped 15% to $555,729 in November compared with the year-earlier month, Quotable Value says. Values in Auckland rose 24% to $931,807.

Auckland's property market has been on a tear as migrants and investors compete for limited housing stock. 

That's prompted the government and the Reserve Bank to introduce new measures to quell the risk from a housing bubble. The central bank introduced Auckland-specific lending restrictions in November, while the government's more stringent enforcement of taxing speculators' capital gains began in October.

"Home values in Auckland are still increasing but at a slower rate than last month and it appears new rules to curb investors along with restrictions on the capital flow out of China have led to an easing in the market," said QV spokesperson Andrea Rush.

The number of houses sold at auction in Auckland has fallen, with some agencies reporting clearance rates as low as 30%, when they had regularly been around 85%, the agency says.

"So far we are not seeing any drastic price easing in the statistics, but we can definitely say that activity is well down on previous months," says QV valuer James Wilson. 

"Whether this will correlate to values decreasing across the board remains to be seen. However, anecdotal evidence suggests that value levels among some categories of housing, in particular investment housing stock, may have fallen."

Values in Hamilton rose 19% to $435,848 in November from the same month a year earlier, and valuer Chris Price said the pace of increase appeared to have slowed.

In Tauranga, values increased 16% to $525,758 and valuer David Hume says it appears some of the heat has come out of the market.

In Wellington, values advanced 3.9% to $558,211, after being flat for some time with valuer Kerry Buckeridge noting there is a shortage of stock and high interest and demand from buyers in available stock.

In Christchurch, values gained 2.9% to $480,464 and valuer Damian Kennedy says there are many houses being sold on an "as is where is" basis as more insurance claims are settled following the city's earthquakes, and those lower-value sales may be weighing on the market.

Across other centres, Dunedin values increased 5.1% to $306,610, while in Napier values advanced 3.9% to $338,960, Palmerston North rose 3.6% to $298,847, and Nelson gained 3.6% to $424,022.

North Island provincial centres nearly all showed an increase in values over the past year, with many showing steady value growth after a long period of little or no growth, QV says.

In the South Island, values in many centres rose although values on the West Coast in the Buller and Grey districts continued on a downward spiral following mine closures.

(BusinessDesk)