House prices in south Auckland’s Papakura rose more than any other district in or near a main centre this year, says the latest QV Quartile Index.
The rising costs are the latest in a string of headline-making figures that demonstrate the relentless rise of house prices the country has been subject to in 2021.
According to the QV Quartile Index, over the 11 months from January 1 to November 30, Papakura experienced a 41 per cent increase in “first home” values – properties at the lower end of the market, more likely to be sought out by first home buyers.
Christchurch followed closely behind with a 37.7 per cent increase, while Auckland’s Franklin region grew by 33.7 per cent – the third-highest growth rate in this category.
Outside the country’s main centres, first home values increased by an even greater percentage in Stratford and Waitomo – both by nearly 60 per cent – alongside Wairoa, South Taranaki and Kaipara, which recorded growth between 44 and 48 per cent.
QV spokesman Simon Petersen said 2021 has been “an absolutely bumper year” for New Zealand’s residential property market.
“We all thought 2020 was a big year, and yet values increased by less than half as much on average as they have this year,” he said.
“2021 has certainly been action packed. We’ve seen the return of loan-to-value ratios, rapidly rising debt-to-income ratios, high inflation, low-but-rising interest rates, and a raft of significant tax changes designed to take some of the steam out of the market.”
Petersen said just about the only thing that hasn’t been seen this year is significant drops in home values, and it’s not likely they will be seen next year, either.
A continued rise in interest rates can be expected, he said, making things even more difficult for first home buyers.
The only thing that might pass as good news for first home buyers in Auckland and Wellington is that houses at the top of the property market are getting more expensive faster than those at “cheaper” end.
“This spring swing from entry-level properties to the far more expensive homes at the top of the property ladder suggests that rising interest rates and affordability constraints are starting to bite first home buyers, who will be finding things even more difficult right now,” he said.
In Auckland, entry-level home values increased by an average rate of 5.9 per cent in the November quarter compared to a 9.4 per cent hike in the upper quartile.
It’s the same in Wellington’s Hutt City: in the past three months entry-level home values went up by less than half as much as the homes higher up the property market.
The only main centre where the rate of first-home value growth has not trended downward this year is Christchurch, which hit an annual high growth rate of 15.3 per cent between September and November.