WELLINGTON: Cooling Auckland housing market helped slow the pace of property value growth across New Zealand as regulatory curbs imposed last year continue to dent investor demand in the country’s biggest city.
The average value of a New Zealand home rose almost 13 percent to $556,206 in January from a year earlier, slowing from a 14 percent annual increase in December, according to state-owned valuer Quotable Value. Values were up 0.7 percent in the three months through January, slowing from a 2.9 percent pace in the three months ended December 31.
Auckland property values rose at an annual pace of almost 20 percent, down from a 23 percent increase in December. QV said property values decreased in January, and values were up 1.2 percent in the rolling three-month period to $928,921 in January.
“The value decreases in parts of Auckland could be in part due to the seasonal impact of the holiday period and the housing market may pick up in the usually busiest months of the year, February and March,” QV national spokeswoman Andrea Rush said in a statement.
“However, it’s more likely to be continuation of the softening in the market we saw following the introduction of new rules by the government and the Reserve Bank to curb investor activity in Auckland and the restrictions on the flow of capital out of China that occurred late last year.”
Auckland’s property market has been a bugbear for regulators as a shortage of supply and rapid inbound migration pushed up prices, stoking concerns about the affordability of housing. That 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. James Wilson, QV valuer, said investor demand in Auckland tapered off during the final months of 2015, though appetite for newly-built housing and off-the-plan purchases was “extremely strong.”
Values in Hamilton rose 20 percent in the year through January, the same annual increase from a month prior, while Tauranga values were up 22 percent year on year, accelerating from an 18 percent annual gain. Wellington region values rose 5.9 percent in the year, accelerating from a 5.1 percent annual pace in December, while Christchurch values were up an annual 2.7 percent, and Dunedin values increased 6.1 percent year on year.
