6 Sep 2016

Auckland's average house value tops $1 million

2:23 pm on 6 September 2016

The average value of an Auckland home has passed the $1 million mark for the first time.

Sold house in Auckland

The average value in Auckland's central and North Shore suburbs is more than $1.1 million. Photo: RNZ / Diego Opatowski

Quotable Value's monthly house price index for for August shows the average in Auckland is now $1,013,632 - up from July's figure of $992,000.

The Auckland market grew 15.9 percent in the last year, and 6.1 percent over the past three months, QV spokeswoman Andrea Rush said.

Values there are now 85.5 percent higher than the previous peak of 2007. When adjusted for inflation values rose 15.4 percent over the past year and are 57.5 percent above the 2007 peak.

Ms Rush said there was a strong surge of activity in June and July, but it now appeared new loan-to-value lending restrictions - due to come in next month but already adopted by banks - had started to have an impact in Auckland, Tauranga and Hamilton.

"In recent weeks there has been a drop off in market valuation requests, auction clearance rates, open home attendees and loan application rates in these centres."

Auckland growth surges

Despite recent indication activity may be cooling, this was yet to flow on to the growth in values, which had risen strongly across the Auckland region over the past quarter.

Central suburbs in the former Auckland City Council area increased in value by 14.3 percent over the past year, and 5.3 percent over the past three months. The average value in this area is now $1,180,245.

Values in the former North Shore City suburbs also rose 14.9 percent year on year and 5.5 percent over the past three months, to an average of $1,183,443.

In Manukau suburbs, a 6.9 percent increase over the past three months has seen values rise to an average of $881,828.

Waitakere City rose 5.5 percent over the past three months to an average $806,832.

Signs of sales easing

"Despite the average value across the region hitting a milestone of $1 million following a surge of activity ahead of the new lending restrictions being announced in July, there's been a noticeable easing in market activity across Auckland over the past couple of weeks," QV general manager Jan O'Donoghue said.

"More homes are passing in at auction, or receiving no bids although properties are still selling post auction by negotiation.

"We saw a similar trend about this time last year when new LVRs [loan to value ratios] of a 30 percent deposit were announced for investors in the Auckland region.

"So it's most likely this change in the market is being caused by the latest LVR restrictions requiring a 40 percent deposit by investors as well as the continued lack of stock listed for sale in the market.

"However, a shortage of listings and lower sales volumes do not seem to have impacted on value growth, as yet they are still increasing."

National average over $600k

The national average price for August increased 14.6 percent over the past year to $612,527.

QV said the Wellington market continued to see strong growth with values there increasing at a faster rate than the Auckland region over the past year and the Dunedin market also continued to show strong levels of activity and demand.

Some regional centres, including Whangarei, Rotorua and Queenstown, have also seen significant value growth of more than 25 percent over the past year.

"The Christchurch market by comparison is relatively flat, with a shortage of listings in the market resulting in not much activity apart from in the new build and sub-division part of the market," Ms Rush said.