House prices in New Zealand recorded a mini bounce back in October with values up 2.1 per cent over the month.
The average value of a property in New Zealand is now $970,174.
In the nation’s biggest city, Auckland, property values rose 2.6 per cent in October, up from the 0.6 per cent growth recorded in September.
In the past 12 months property prices in Auckland have jumped 26.3 per cent to an average value of $1,381,456.
The main centre with the highest growth rate was Tauranga, where property values climbed 4.3 per cent in October and 35.8 per cent annually, to record an average value of $1,091,420.
CoreLogic NZ Head of Research Nick Goodall said the price growth was likely due to the Delta outbreak and a renewed tightening of supply while demand remained high.
“Aotearoa’s Alert Level 4 settings, which were enforced nationwide for two weeks on August 18 and lasted for five weeks in Auckland, had a noticeable impact on total listings,” he said.
“Already low levels of supply dropped further during this time and while inventory levels have since started to recover, advertised supply is likely lower now than otherwise may have been, which would have placed renewed upwards pressure on prices.
“At the same time, demand for housing appears to have been less affected.
“Confidence in the property market remains high and while tighter credit conditions, worsening affordability and increasing interest rates will weigh on market activity, the promise of tougher conditions in the future can actually lead to increased competition in the short term as buyers aim to beat any further policy intervention.”
At the start of October, the Reserve Bank of New Zealand increased the cash rate by a quarter of a percentage point, to 0.5 per cent. It was the first time in seven years the bank had increased interest rates.
At the start of November, it also became harder for owner-occupiers to borrow at a high loan-to-value ratio with the reserve bank mandated speed limit halving from 20 per cent of new lending above 80 per cent LVR to just 10 per cent of new lending.
Price growth in Hamilton sat at 3.7 per cent in October, down from a September growth rate of 5.2 per cent.
The average value of a property in Hamilton is $853,407.
In the nation’s capital city of Wellington, property prices rose 1.9 per cent in October and 36.1 per cent for the year.
The average value of a property in Wellington is $1,103,600.
The annual rate of growth in Christchurch is the highest on record at 31.9 per cent.
In October, values climbed 4.1 per cent and 7.6 per cent over the past three months, with the average property value sitting at $693,864.
Dunedin is the cheapest of the six main centres to buy a property in with an average value of $683,060
Across the provincial centres there was a mixed bag of results with some towns recording growth while others lost ground.
Gisborne recorded the highest rise in property values, at 3.6 per cent to an average value of $616,498.
Queenstown has the highest average property value city or country at $1,526,602.
Property values jumped 2.5 per cent in October but are up 10.2 per cent in the past three months and 32.7 per cent annually.
Hastings has recorded the highest growth in property values annually at 41.9 per cent but in October recorded a modest 1.3 per cent rise.
The average value of a property in Hastings is $854,177.
New Plymouth was the only provincial centre to record a drop in the average value, down 1.6 per cent to $663,244.
But values are up 3.4 per cent for the quarter and 24.4 per cent annually.
“As we approach the end of the year potential borrowers and current owners must prepare for increasing costs of home ownership, along with increases in other living costs,” Mr Goodall said.
“Regulation is also unlikely to go away as affordability continues to worsen and the property market remains a politically sensitive topic.”
Mr Goodall said the latest lift in house prices was not unexpected and the longer term trend of slowing sales volumes and values would likely reassert itself soon, due to rising interest rates and tighter tax and lending rules.
“However, in lieu of a big rise in unemployment, sharper falls in house prices still seem unlikely,” he said.