Rotorua property investor Maree Tassell has noticed a change in her city over the past 18 months.
For a long time, the property market just ticked over while other regions, particularly around Auckland, shot ahead.
But then things started to change. Auckland investors came into town when new loan-to-value restrictions that required them to have a 40 per cent deposit made it harder to buy in the big city.
People started to move to Rotorua to live, even when they were working in Tauranga.
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It is now common for properties to get multiple offers and open homes are busy, she says. Other things, such as the town’s new cycleways and markets, are proving a drawcard for those looking for a different lifestyle.
“I think it will continue,” Tassell says. “There are other markets that have cooled and it will eventually here, as well, but it starts later and finishes later in the smaller provinces.”
QV has released its latest data, which shows nationwide values increased 11.1 per cent over the past year, the slowest rate of growth since 2015.
There was no national value change in the past three months – the average value nationwide is now $631,147.
But it is the change in the Auckland market that is putting the biggest damper on that figure. Auckland’s prices increased 10.7 per cent over the year, which is the slowest rate of growth since 2014.
Over the past three months, values dropped by 0.4 per cent across the region.
QV Auckland homevalue manager James Steele said demand was down as tougher lending restrictions made it difficult for buyers to get finance.
“However, cash buyers and those who are able to obtain funds, or are able to use equity built up over the past five years of substantial growth, are out hunting for good deals,” he said.
“Well-presented properties in decent locations are still selling well although it’s taking a little longer than when the market was very hot and properties which are in poor condition or have issues are sitting around for a lot longer if vendors are unwilling to negotiate on price. First-home buyers continue to prop up entry-level areas, but appear to be favouring property which is ready to move into.”
Other areas are still experiencing strong value growth. Rotorua is up 27.8 per cent over the past year to an average $396,432. Hastings is up 22.8 per cent to $408,510.
Auckland man Tim Rowe recently moved with his young family to Havelock North. He said buyers got more for their money in the regions but buying was not straightforward.
“Once we shortlisted the suburbs based on school zones, there was a lack of supply. Buying out of region was difficult as houses sold before we even got to see them. If we hadn’t gone for school zones would have saved a lot more.”
They visited three times to see open homes before putting in an offer. “We had already sold so there was time pressure.”
QV data shows Queenstown Lakes District is also experiencing sharply rising prices, up 23.7 per cent over 12 months to $1.042 million, although QV spokeswoman Andrea Rush said that region was slowing.
Northland and Wellington also posted annual value increases of more than 20 per cent.
QV spokeswoman Andrea Rush said Wellington’s average value had surpassed $600,000 for the first time. “The rate of value growth there is continuing to slow but the market remains buoyant, particularly in more affordable parts of the region such as Porirua and Hutt Valley. The Wairarapa and Masterton markets are now seeing strong value growth as a flow-on effect of recent growth in Wellington values,” she said.
“The Dunedin market also continues to rise steadily and Hamilton values are now increasing in the city again after a recent downward trend that followed the new loan restrictions.”
She said sales had picked up in March compared to February but were still at their lowest level for a March month since 2014.
Investors represent 39 per cent of residential sales, compared to 20 per cent to first-home buyers and 27 per cent to people moving between properties.