House prices rose an estimated 4% in the three months ended March, the 11th successive quarter in which they have risen and bringing the annual increase to 22%, according to the latest figures from Quotable Value.
The annual increase was down from nearly 24% for calendar 2003 but the quarterly increase for the three months ended December was revised from the previously published 4.9% to 6.3%. That was still below the 7.3% increase recorded in the September quarter.
Blue Hancock of QV Valuations says the June quarter is likely to still show further increases in house values but that the rate of increase is beginning to reduce.
"Important factors like the continued downward trend in net migration and decreasing affordability due to high house-price-to-income ratios could continue to reduce buyer demand in the short term," Hancock says.
Among the areas recording the fastest growth in house prices was Invercargill, up 34.9% for the year ended March, Napier, up 31%, Christchurch, up 30.7%, Dunedin, up 29.6%, Tauranga, up 27.9%, Nelson, up 26.5% and Waitakere, up 23.1%.
The increase for Auckland City lagged the national average at 19%, but Hancock says sales information for Auckland for the latest quarter is incomplete. And the highest quarterly growth rate of 6.1% was recorded in Papakura, which Hancock describes as a "ripple effect."
"The ripple effect is the impact of strong house price growth reaching the outer suburbs of a city as many investors and first-home-buyers compete to purchase the cheaper properties available in those locations," he says.
The same factor was at work in Porirua’s 4.1% quarterly growth and Lower Hutt City at 3.5% compared with Wellington’s more modest 2.6% quarterly growth.
