14 Jan 2015

Neighbours feel 'Auckland effect'

6:23 pm on 14 January 2015

The latest figures show New Zealand house prices have risen by 17.9 percent since the market peak in 2007.

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Auckland homes rose in value by almost 10 percent on average in 2014. Photo: AFP

Property valuer QV said home values had increased by 4.9 percent, or $22,652, in the past year alone.

It said it was a mixed year for the market with uncertainty over loan-to-value restrictions, interest rate rises and the election all leading to flat periods.

But house values continued to rise for most areas, with Auckland homes rising by an average of 9.8 percent, or $68,309, in 2014 - nearly double the rate of the national house price increase.

A bus on Auckland's Queen Street

Franklin District and Kaipara District have been affected by Auckland's growth. Photo: RNZ / Diego Opatowski

Within the city, the biggest mover was north-west Manukau, where house prices jumped by 12.6 percent in 2014, to an average of $529,243.

QV said Wellington prices rose by 1.4 percent for the same period, with the east of the city rising most, by 3.4 percent to an average of $592,682.

Christchurch had a 3.2 percent increase, which was slower than previously, as more homes were repaired and built there.

Areas which lost the most value were Hauraki (down 4.1 percent to $238,356), Taupo (down 3.8 percent to $337,511) and Gisborne (down 3.8 percent to $225,617).

QV said satellite towns had been benefiting.

Values in the Franklin District increased 8.5 percent during 2014, while Kaipara District was up 4.0 percent with both areas benefiting from the "Auckland effect".

Values in Timaru, Ashburton and Waimate rose 4.7 percent, 4.8 percent and 4.6 percent respectively, which may in part due to the proximity of these towns to Christchurch.

The QV figures lag those of the Real Estate Institute by several months.

Outlook for early 2015 buoyant

The group that conducted the research for QV, CoreLogic, said the outlook for early 2015 was also buoyant, particularly in Auckland - the result of strong migration, a shortage of housing and continuing low interest rates.

But it said a lack of listings could constrain the market there.

It said the other main centres could experience modest increases, and prices in smaller towns would likely remain steady.

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