Nationwide residential property values have risen again in May according to the latest QV index. This is after values had remained relatively steady for a couple of months. As a result values are up 1.0% over the past three months, 3.9% up over the past year, and are now 2.0% below the previous market peak of late 2007.

Jonno Ingerson, QV.co.nz Research Director said "most of the main cities and towns have increased in value over the past month, with Auckland leading the way. This more widespread increase in values is in contrast to two or three months ago when values in many areas appeared to be flattening off".

Ingerson said "sales activity has remained relatively strong for the past couple of months, with no evidence yet of the usual decline in sales seen over winter. The relatively low number of new listings and sales over the past few years are leading to an increase in pent-up demand. There are now buyers who have been looking for a house for some time and either cannot find something that meets their needs, or are being out-bid by other keen buyers".

"First home buyers and investors remain active in many parts of the country, attracted into the market by low interest rates and perceived affordability. Despite this increase in activity many buyers remain very cautious, wary that economic conditions in New Zealand could worsen if the situation in Europe doesn't improve" said Ingerson.

Auckland

Values in the wider Auckland area are up 1.2% over the past month, 1.4% up over the past three months and 5.7% up over the past year. A few months ago values in the old Auckland City were rising faster than anywhere else in Auckland. In the past three months values in other parts of Auckland, notably Rodney, North Shore and Waitakere are rising even faster. Values in the old Auckland City are now 7.4% higher than the same time last year and 6.5% above the previous market peak in 2007.

QV Valuer Glenda Whitehead said "low listing levels and pent up demand continue to see increasing sale prices in the central Auckland area. Confidence is spreading out from the centre, with increasing values seen in pockets of the wider market. Much of the gains seen in the wider areas again appear to be driven by demand out-stripping listing levels".

"In the central area the bouyant market is predominantly in the $700,000 plus bracket while out in the west or into south-west Auckland demand is strong from buyers with around $400,000 to spend" said Whitehead.

"While vendors may be seasonally orientated, wanting only to list in the summer to autumn months when their properties look their best, buyers who missed out in that period are still on the hunt. Subject to availability of listings, we should continue to see good activity over the winter months" said Whitehead.

"Most sales prices are at or slightly above other recent sales in the same area despite the often reported 'spikey' sale prices being achieved at auctions. Activity remains very patchy, with popular areas continuing to attract attention while value levels in many outer suburbs remain very stable" said Whitehead.

Hamilton

Values in Hamilton have risen slightly for the second month in a row following several months of relative stability. Values have risen 1.1% in the last three months, and are now 2.4% higher than the same time last year. Unlike Auckland, values in Hamilton remain 10.1% below the previous market peak in 2007.

Tauranga

Tauranga values have risen again over the past month after three previous months of slight declines. Current values are 0.7% higher than three months ago, a modest 1.7% higher than the same time last year, and are10.6% below the previous market peak.

Wellington

Values across the Wellington area had been steadily increasing since last August, but in the last three months have begun to slide back again. This has led to a drop of 0.3% over the past three months and values are now only 0.8% higher than the same time last year. Compared to the previous market peak in 2007 current values are 6.0% lower.

"Buyers across the region generally remain cautious, with confidence still dented by the possibility of further public service cuts. First home buyers are still active and investors are coming back into the market, both attracted by the low interest rates" said QV Valuer Pieter Geill.

Christchurch

Values in Christchurch have continued to rise after appearing to falter in the previous couple of months. Values are up 0.8% over the past three months and the growth of 5.4% over the past year is only slightly slower than Auckland. Values in Christchurch are now 0.8% above the previous market peak of 2007.

The areas neighbouring Christchurch continue to increase in value faster than anywhere else in the country. Waimakariri District has increased 14.1% over the past year and Selwyn District 9.3%.

"Sales have been strong in the lifestyle market in the areas surrounding Christchurch and neighbouring rural towns. People have seen the earthquakes as a catalyst to review their living options and are considering a move to the country as a good lifestyle alternative" said QV Valuer Richard Kolff.

"A gap in the supply of new homes exists, especially for small house and land packages within new subdivisions. Those wanting a modestly sized easily maintained property but not wanting to move into an over sixties unit or a retirement village are finding it hard to come by alternatives. A large proportion of sections offered in new residential developments cater for families and have covenants requiring a minimum floor area greater than what these purchasers want" said Kolff.

Dunedin

Like many of the other main centres values had been faltering for several months in Dunedin but have picked up again in the last month. Compared to the same time last year values are now 2.2% higher and are 4.8% below the previous market peak in 2007.

"The typical winter slow down is not yet evident with lower valued properties especially receiving good interest. Perceived affordable housing is helped by the low interest rates but there is still reluctance in the high end of the market" said QV Valuer Tim Gibson.

Provincial centres

Most of the provincial centres have increased in value by around 1% over the past three months with the exceptions being Wanganui which has increased 2.8%, Rotorua, Napier and Nelson have all remained relatively stable, and Gisborne has dropped 1.3%.

Values are now very similar to the same time last year in most provincial centres with the exceptions being Whangarei which is up 3.7% and Gisborne which is down 2.7%.