FEATURES • HOUSING COMMENTARY
Rising house prices show no sign of stopping
H
ouse prices are rising, even as lockdown levels continue to restrict the entire country and listings drop. QV’s latest House Price Index shows the average value of houses increased 3.6% nationally over the past threemonth period to the end of September, up slightly from the 3.3% quarterly growth in August. The national average value now sits at $977,456. This represents an increase of 26.3% year-on-year, down a fraction from 26.6% in August. QV general manager David Nagel says he regards this as an aberration. In the previous three months there had been a reducing rate of growth. Nine of the 16 urban areas QV monitors have shown a slight rebound. Queenstown values rose at a significant 9.4%. In the Auckland region, the average value now sits at $1.391 million, rising 3.3% over the past three-month period, with annual growth of 23.9% dropping slightly from August’s year-on-year growth of 24%. The strongest value gains for the main cities over the past three months have come from Queenstown Lakes District at 9.4% growth in value, well up from 2.9% value growth last month, followed by Christchurch at 7.7% growth, building further on the strong growth of 5.8% in August.
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TMM 04 • 2021
BY SALLY LINDSAY None of the major urban areas QV monitors have seen a decline in average value, but Rotorua continues to slow at 0.8% compared to its rolling threemonthly growth rate of 1.9% in August. Central New Zealand continues to show the strongest annual rate of value growth, with three of the four fastest growing regions all in the lower North Island. Values in the ManawatuWhanganui region have grown 35% in the past year, while Hawke’s Bay and greater Wellington regions have experienced annual growth of 33.2% and 32.3% respectively. West Coast has the strongest annual rate of growth in the South Island at 32%. The three lowest annual growth rates are all in the South Island, with the Southland region experiencing a still-significant 20.3% increase, the Tasman region showing 22.3% and Otago at 23.3% annual growth.
Big step up in mortgage interest rates predicted Mortgage interest rates could be pushing 4% by the end of next year on one and two year rates and 4.5% into 2023, says CoreLogic. These rates are still low by past standards, but a large proportional increase from existing levels. The major trading banks have already started increasing interest rates since the
Reserve Bank’s lifting of the official cash rate (OCR) this week by 0.25% to 0.50% and a clear indication it would have been increased in mid-August had it not been for Covid lockdowns. ANZ, the country’s largest bank, will increase its floating and flexi home loans by 0.15% from October 12 or new loans and from October 26 for existing loans. Kiwibank says will pass on the full 0.25% OCR increase to mortgage borrowers, although it has pointed out its rates are still below other major banks. The ASB says it will hold rates. CoreLogic senior economist Kelvin Davidson says higher mortgage rates clearly mean borrowers are going to have to divert more money towards paying their mortgage, and some may not be able to access as much home finance as before,” says Davidson. “There is already the sense some property deals have started to get a little stuck, with buyers just pulling back a little but vendors not budging on the asking/reserve price,” he says.
Rents remain at all-time highs despite lockdown Rents nationally remained at an all-time high of $550 a week in August despite the country entering a nationwide lockdown. Trade Me’s latest Rental Price Index shows the national median weekly rent
