The latest QV/CoreLogic monthly house price index stats show nationwide values have increased by 7.7% over the past year.
If you’re sitting in Auckland reading this then you know that values there are rising much faster than that. Conversely if you’re sitting just about anywhere else in the country you’ll know that values aren’t rising anything like that quickly.
We are actually at the point where talking about a national number is meaningless. In fact we got to that point a long time ago.
So let’s start by talking about Auckland. Over the past few months we have seen values accelerate away again. Things slowed for a while after the LVR speed limits came in, but now we are back at 4.6% increase over the past three months. That equates to an average value increase of $35,000 since the New Year.
Of course there is not one Auckland market either. Values have increased the fastest in Waitakere and old Auckland City at 5.2% over the past three months. Next fastest is Manakau at 5.0% then North Shore at 4.8%. Papakura flattened off for most of 2014 but since October values have been picking up again and the latest three months have increased 3.8%. Rodney in the north and Franklin in the south are feeling less of the Auckland heat and have increased 3.0% and 2.4% respectively over the past three months.
Incidentally, values across Auckland were increasing faster than this a couple of months ago, so we have seen a slight slowing down.
Auckland is alone in driving up that nationwide figure. The reasons for Auckland’s increase have been well chewed over - High migration, good consumer confidence, low interest rates and of course the reported housing shortage.
Let’s turn our attention to the other main centres. Christchurch used to stand beside Auckland helping drive up nationwide prices. But Christchurch has slowed right off since late 2013 and values now are only 4.4% higher than they were back then.
The annual change for the other main centres varies from 5.1% in Tauranga, 3.4% in Hamilton, and 0.5% and 0.6% in Wellington and Dunedin. All of those cities saw values dip during 2014 then recover in the past few months. That makes the last three month increase look more impressive, when I believe it is just recovering those 2014 losses and won’t continue.
The rest of the country is more or steady. Amazingly really. I for one was predicting that the LVR speed limits would hit small towns very hard. That doesn’t appear to be the case.
There are really only two parts of the country that are showing sustained declines in value. One is Ruapehu District where the towns of Taumarunui and Ohakune have been dropping steadily in value since the peak of the market and have now lost 28% of their value since then.
The other part of the country in decline is Buller District where the towns of Westport and Reefton have dropped over 10% since late 2012 when Solid Energy closed Spring Creek Mine with the loss of 360 jobs.
What are the next few months likely to bring? Activity in Auckland was strong in March and the economy and confidence there remain strong. Bad news came out of Statistics NZ a couple of weeks back when the latest building consent numbers showed a decline across the country, including Auckland. A decline in building consents is the last thing Auckland needs as increased housing supply is one of the ways to slow the rapid value increases. Therefore I expect Auckland values to keep increasing, but I don’t except the rest of the country to follow any time soon.