Sizzling property market continues in 2021 as house prices maintain their upward march

The sizzling property market has continued in 2021 as house prices maintain their upward march.

A shortage of stock continues to put upward pressure on prices while low interest rates and a recovering economy encourage buyers.

“Major urban centres continue to show strong gains in value over the past three months, with Tauranga and Palmerston North leading the way with 10.46 percent and 9.19 percent growth respectively,” says QV general manager David Nagel.

“The larger centres were generally first to show the rapid value growth and this was primarily driven by both first-home buyers and investors competing for the very limited supply of entry-level housing stock. But the market strength has now spread to the higher value locations in the major centres as confidence returns in the post-lockdown economic recovery.”

• The average value increased 5.16 percent nationally over the past three month period
• This represents an increase of 12.96 percent year-on-year
• The average value now sits at $815,898
• The average value in the Auckland region sits at $1,179,253

“The rapid and sustained residential value growth has compounded affordability problems, making it difficult for first-home buyers to put together a deposit in the bigger cities,” Nagel says.

“With the return of LVR speed limits in March this year, we may see a gradual cooling of the market in the second half of 2021, particularly in the entry-level locations as property investors reach their credit limits and first-home buyers struggle to raise a deposit.

“But with the long-term forecast for housing demand in New Zealand looking positive, it is difficult to see the market take a significant turn for the worse any time soon.”