By Tina Morrison
June 1 (BusinessDesk) - New Zealand residential property values continued to push higher in May, as increased demand and limited supply underpinned the market.
The average value of a New Zealand home rose 12.4 percent to $577,829 in May from the year earlier, in line with April's 12 percent annual pace, according to state-owned valuer Quotable Value.
New Zealand's housing market is being bolstered by record migration as more people compete for available supply, while record low interest rates stoke investor demand. The latest figures show annual house values grew faster than 20 percent in Hamilton, Tauranga, Queenstown Lakes district and some areas of Auckland.
"Residential property values are rising rapidly across Auckland again and they also continue to accelerate in many other parts of the country, with much of the activity driven by strong demand from investors," said QV spokesperson Andrea Rush. "Migration is continuing at the highest levels seen in 100 years and this population growth coupled with growing demand from investors, means housing supply, particularly in Auckland and Queenstown, is not able to keep up with demand and this is driving values ever higher."
Rush noted strong growth in Tauranga, Hamilton, Wellington, Dunedin and Queenstown, and many regional centres and smaller towns located within commuting distance of these main centres.
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. The government and the Reserve Bank last year introduced measures to try and cool the city's property market. QV said today that home values across Auckland have begun accelerating again as it appears that new measures aimed at curbing investor activity in the market has not made much of a dent in demand from investors.
Growth in Auckland house values slowed to a 15.4 percent annual pace in May, from a 16.5 percent pace in April, taking the average value in the region to $955,793. Values in Papakura jumped 20.7 percent, Manukau increased 19.6 percent, Rodney rose 17.6 percent, Waitakere advanced 16.5 percent, North Shore gained 14.1 percent, and Auckland City rose 13 percent.
QV said the Auckland market was buoyant and real estate agents were reporting a shortage of listings, with some properties being sold before reaching the wider market and many properties transacting within short timeframes by property speculators.
"Auckland needs more housing, both within the existing urban metropolitan boundary and on 'future urban' zoned land, as well as new infrastructure to service it," Rush said. "It appears to be investor demand that's driving the rapid value growth in Auckland and other parts of the country."
Hamilton values increased at a 26.2 percent annual pace, Tauranga gained 23.1 percent, Queenstown Lakes rose 22 percent, Wellington advanced 11.9 percent, and Dunedin rose 10.3 percent. Christchurch values edged up 3.3 percent as supply meets demand, QV said.