QV: Housing market cools in Auckland, heats up in Wellington
House prices in the capital are slowing creeping up as Auckland's red-hot market cools off, forcing potential buyers to consider apartments or houses in the outer suburbs.
The latest figures from valuation company QV show property values in Wellington increased by 5.2 per cent during 2015, with the average house price now sitting at $569,370.
Meanwhile in Auckland, while house prices have been surging, the growth has almost ground to a halt. Average prices in Auckland rose 22.5 per cent in 12 months to $933,264, but only 0.2 per cent in December, and QV now expects Auckland prices could drop in the early part of 2015.
QV national spokeswoman Andrea Rush said following the introduction of the new measures designed to curb house prices, the rate of growth in the Auckland market slowed, while values in many other centres, including Wellington, saw significant value increases.
"The first nine months of 2015 showed moderate value increases and then the market really kicked off in the last three months of the year and is still hot now."
There had been strong demand across the board, particularly from first-home buyers and investors, Rush said.
* Auckland housing market cooling off
* Average New Zealand house now $550,000
* Prices slip from record high as listings come on the market
* Wellington suburbs join the million-dollar club
However, that demand was outstripping supply, with a shortage in property coming on to the market, she said.
"There has also been an on-going to be a shortage of properties listed for sale in the Wellington market during 2015 so the increase in demand has meant that more buyers have been competing for the same properties which began to push prices up.
"The change in sentiment occurred quite quickly in the three months to Christmas and the Wellington market has remained busy right throughout December, which is unusual for the holiday period and there's no sign of it slowing down," she said.
"Even the end of the year, there was a shortage of listings and agents were reporting high levels of demand not seen in the market for some years right through until Christmas."
First-home buyers were facing "stiff competition" and rising values in the Wellington city suburbs were forcing them to look at houses in the wider Wellington region, Rush said.
"This is why they are now turning to the apartment market as they can get into a tidy, maintenance free, central home for under $500,000 and others are looking further out to Porirua and the Hutt Valley."
Bayleys Wellington residential manager Grant Henderson said demand for homes in the hot-spots - on the city fringe - were always running hot.
People moving away from Auckland were finding they could get a higher return on investment in Wellington, Henderson said.
However, supply was continuously failing to meet demand, he said.
"We have hit historic lows for available stock. Usually there are about 900 to 1000 houses [advertised], but that is down to about 540.
"But the scary thing about that is, only about 200 of those are homes. The rest are apartments or sections."
Henderson believed the capital's housing market had been undervalued for a long time.
He predicted house values would continue to increase over the next 18 months, he said.
CoreLogic director of research Jonno Ingerson said Wellington house values accelerated over the past few months and he saw no evidence that would slow down - especially where demand was outstripping supply.
By the numbers:
Wellington suburb: Average house value/12-month change in value
Porirua: $397,607 - up 4.8 per cent
Upper Hutt: $347,249 - up 3.8 per cent
Hutt: $388,177 - up 5.1 per cent
Wellington: $569,370 - up 5.2 per cent
Wellington - Central and South: $573,201 - up 3.8 per cent
Wellington - East: $624,730 - up 5.4 per cent
Wellington - North: $499,707 - up 6 per cent
Wellington - West: $657,850 - up 7 per cent