New Zealand residential property values continued to gradually increase in 2011, rising 2.4% over the past twelve months, according to the latest QV index.
Values in Auckland were 4.3% better than a year earlier and underpinned the nationwide gains as a lack of new listings and good housing for sale stoking demand for quality properties, the valuations company said.
‘Despite national values moving upwards during the year, the property market continued to be characterised by lower than-normal sales volumes,’ said research director Jonno Ingerson.
‘First home buyers came back into the market in 2011, encouraged by low interest rates, while investors were largely on the sidelines,’ he added.
Overall the property market spent much of last year in decline as households used record low interest rates to focus on repaying debt rather than take out a new mortgage, keeping a damp on the number of properties sold and encouraging owners to hold off selling.
Ingerson said the outlook for 2012 is mixed. Auckland will probably see values further increase amid a growing population, weak building activity and limited new listings.
Christchurch values will depend on the timing of the city's rebuild and whether there are any more earthquakes, while Hamilton and Tauranga values are expected to be stable.
‘The property markets in the provincial and rural areas are heavily dependent on the strength of the local economies in those areas. A strong rural sector typically has a positive impact on the property values in towns supporting those areas, likewise the coming or going of large local industries can have a significant impact,’ Ingerson said.
Auckland's average sale price in the three months ended December 31 rose to $597,032 from $513,792 in November.
Wellington area property values were 0.4% lower than in December last year, slowing the decline through the first half of 2011. The average three month sale price of $483,160 rose from $421,778 a month earlier.
Christchurch property values were 4.3% above the same month a year ago, with the average sale price at $371,885, down from $372,040, and Dunedin property values were 1.6% higher than in 2010, with the average sale price at $265,210 in December, up from $257,951 in November.