THE PROPERTY MARKET IN NEW ZEALAND
BUYING PROPERTY
Property values are continuing to increase however this is not universal across the country. Values have increased in urban and rural areas but not in provincial New Zealand. The increase in values in many areas, particularly central Auckland, can in part be attributed to a lack of supply, with a shortage of desirable and well presented properties for sale. When quality properties come up for sale they are in high demand which is tending to push the price up.
WELLINGTON
Property values in the Wellington area are just 0.4% below the same time last year and 6.2% below the 2007 market peak.
Despite increased market activity in early 2012, prices are generally quite static throughout Wellington. Properties in the lower price brackets are meeting the greatest demand with higher priced quality properties also attracting interest.
CHRISTCHURCH
Values continue to increase in Christchurch, as they have been doing since just after the February 2011 earthquake, and are now 3.7% above the same time last year and just 0.7% below the 2007 market peak.
The areas immediately surrounding Christchurch have continued to show strong value growth.
QV New Zealand report that areas like the north west of Christchurch continue to benefit from good demand from purchasers. Open homes are busy and resulting in a multiple offer situations for the vendors. This is particularly the case for houses in under $400,000 with demand being fuelled by a steady stream of insurance payouts to home owners who have lost their homes as a result of the earthquakes.
AUCKLAND
Values in the Auckland area are increasing the fastest of any of the main centres, up 5.1% over the past year. Values are above the previous market peak in 2007 by 1.9%.
Inner city suburbs continue to be the highest in levels of value growth within the greater Auckland area. The North Shore has shown slightly slower value growth but is still up 4.0% over the year. Across the rest of Auckland values are up over the last year by between 2.5% in Franklin (to the south) to 3.2% in Waitakere (to the west) with the exception of Rodney (to the north) where values have been volatile over the past few years and now sit 1.6% above last year.
RENTAL VALUES
WELLINGTON
Housing forecasters predict that between 2006 – 2016 the number of renter households in Wellington will rise by 24%.
In late 2011 and early 2012, listings in Wellington fell 20 per cent on the previous year. Rents inched up only 2 per cent on the year before, compared with a national average of 3 per cent. At the same time, demand in Wellington rose 14 per cent, in line with the national average.
Currently there is a high demand for properties, particularly in the city and areas on the fringe of the city (i.e. Mt Victoria, Thorndon, Mt Cook, Kelburn). Good quality city apartments are being leased quickly.
There are often a number of applicants for the same property. Applications need to be lodged promptly with references available to be contacted.
In some suburbs, good quality family homes are limited particularly in the under $650/week bracket. We recommend families need to spend a minimum of $500/week for an average standard home (3 bedrooms, 1 living, 1 bathroom). These are not likely to be in sought-after suburbs.
Rents at the lower price range are often non negotiable.
Tenants need to be aware of heating options, insulation and situation of properties at all times of the year. (Be guided by your Consultant)
- 3 bedroom fully furnished apartments are in limited supply.
- 4 to 5 bedroom properties are in short supply.
Relocations International advises that currently demand exceeds supply and there are more people looking to rent quality houses than there are houses available. As a result, there are often multiple applications for one property. Property Rental Agents often give Relocations International clients first option, but clients need to be able to decide quickly when they wish to secure a property.
CHRISTCHURCH
Rental activity is far more dynamic than property sales in Christchurch. Properties for rent come onto the market more frequently and stay on the market for a shorter period.
The Christchurch market has seen a significant fall off in the availability of rental property in the period since the February 2011 earthquake.
Firstly the demand for rental properties grew significantly straight after the quake as people searched for somewhere to relocate to from uninhabitable houses. Secondly a reasonably large proportion of rental inventory in some key areas of the city has had to be withdrawn as it is uninhabitable.
The level of activity of people searching for rental properties varies significantly from week to week. The impact of the Christchurch earthquakes has only further exacerbated this over recent months. Demand, especially for family homes in the least earthquake affected areas is strong and rents are increasing for these properties.
AUCKLAND
Rental demand has been high throughout much of last year with high demand and rising rents in most areas.
Key suburbs continue to see high demand, especially homes where landlords have taken advantage of recent government incentives to install insulation. Feedback from property managers lately is that newly insulated homes are renting first.
The CBD has also seen high demand, especially with the boost of relocations from Christchurch and migrants from overseas which stimulates Auckland’s market. CBD property managers report huge demand in the one and two bedroom middle market. However, they report executive type apartments renting at $900 and above have been slower to rent.
Other traditionally affluent central city suburbs such as Remuera, St Heliers and Mt Eden seem to have a steady stream of rentals coming onto the market.