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Softening in Auckland market 'no surprise, regions are the real story'

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Fuseworks Media
Fuseworks Media

"The latest Quotable Value statistics showing Auckland house values down 0.2% in the past three months are entirely predictable given Government and Reserve Bank restrictions which came into effect late last year, says Century 21 New Zealand National Manager Geoff Barnett.

"Let’s not forget that this is only a slight softening. Overall Auckland’s house values are up nearly 17% on a year ago. I still believe 2016 will be relatively strong across New Zealand when you consider real estate in many of the regions is performing well, interest rates remain low, and Auckland’s relentless population growth continues.

"What we’re now seeing in the Auckland market is actually more sustainable and more realistic. The real story from QV’s latest average house values is that overall the rest of the country has seen a bit of lift in the last quarter - particularly when you look at the likes of Hamilton, Tauranga, Hawkes Bay, Nelson and Wellington.

"Our capital city is now going very well with values in the Wellington City area up 4.2% in the last three months and up 8.9% on a year ago. This reflects what we’re hearing from our Wellington franchise owner, Joseph Lupi of Century 21 First Choice Realty.

"The likes of Auckland property investors are switching to Wellington for much better rental yields while also enjoying strong capital gains. We’re seeing some real excitement in the capital with many properties now selling well over valuation, while Auckland’s more central suburbs are effectively catching their breath."

Mr Barnett says another observation is that Auckland’s outlying areas remain popular.

"With interest rates low, we’re seeing more young Aucklanders in particular opting out of their central rentals to buy further out. It seems many are now more willing to accept a longer commute if it gets them on the property ladder. Century 21’s offices in the likes of Manurewa will tell you for free that more ‘city kids’ are coming out every day," he says.

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