Tauranga’s average house price breaks $1m mark
While other major centres in New Zealand are beginning to show more obvious signs of cooling, Tauranga’s residential property market remains stubbornly hot.
House prices in Tauranga continue to grow at a rapid rate, rising 8.3 per cent for the quarter to a new average of $1,042,533.
This is according to the latest statistics from QV.
“That three-month rolling average is slightly down on the 10.2 per cent we reported last month but higher than the 7.8 per cent we reported back in April and considerably higher than this month’s national average of 6.6 per cent, says QV property consultant Derek Turnwald.
“Agents report a decline in investor interest but not an increase in investors selling properties.
“We should have a clearer idea of their intentions by late winter or early spring, once they have had more time to gauge the market and the effect of LVR changes, the bright-line test extension and tax deductibility law changes.”
Meanwhile, Derek says agents are seeing a drop-off in interest from first-home buyers, “perhaps as a result of reports from the Reserve Bank and others that interest rates are likely to start rising in the mid-to-long term”.
Nationally, the average value increased 6.6 per cent nationally over the past three-month period to the end of June, down from the 8.8 per cent quarterly growth we saw in May, with the national average value now sitting at $943,184.
This represents an increase of 25.6 per cent year-on-year, up from 23.7 per cent last month.
In the Auckland region, the average value now sits at $1,347,092, up 6.2 per cent over the last quarter, with annual growth of 23.4 per cent, up from May’s year-on-year growth of 21.8 per cent.
“It’s too early to say the market has turned, but this will be encouraging news for government officials and regulators, concerned about the financial risks of an overheated property market,” says QV general manager David Nagel.
“This easing comes after a range of government policy announcements earlier this year to dampen activity by property investors and speculators, while there’s also plenty of chatter about interest rates rising later next year. But we’re also now into the seasonal downturn that normally accompanies the cooler months, so it’s difficult to attribute the cause to any single thing.”
Of the 16 major urban centres QV monitors, all except Rotorua have shown a reduction in quarterly growth compared to last month.
The strongest value gains over the past three months have come from Hastings at 8.6 per cent growth in value, down from 11.4 per cent last month, closely followed by Palmerston North at 8.5 per cent growth, down from 10.7 per cent quarterly growth QV reported last month.
For the major centres, Tauranga continues to lead the way for the second consecutive month with 8.3 per cent value growth over the past three months, down from 10.2 per cent quarterly value growth in May.
Tauranga is joined by Christchurch on 8.3 per cent quarterly growth, both down from around 10 per cent quarterly growth last month.
Central New Zealand continues to show the strongest annual rate of value growth, with the three fastest growing regions all in the lower North Island. Values in the Manawatu-Whanganui region have grown 36.0 per cent in the past year, while the greater Wellington and Hawke’s Bay regions have experienced annual growth of 33.3 per cent and 31.5 per cent respectively.
The three lowest annual growth rates are all in the South Island with the Otago region experiencing a still significant 18.6 per cent increase, Southland showing 19.1 per cent and Tasman at 22.9 per cent annual growth.
“With our borders essentially closed to new residents, we’ve given the housing supply chain an opportunity to catch its breath with record rates of new houses being constructed, particularly in the main centres,” says Nigel.
“But while interest rates are still at record lows, accompanied with a dearth of property listings in most parts of the country, it’s unlikely that we see house values fall any time soon.
“We’ll likely see a continued slowing in the rate of price increases over the coming months as the property market absorbs the recent changes and winter really sets in.”