New Zealand residential property values have increased at their fastest annual pace in over a year, as Auckland housing prices clock the biggest gain in over a decade, fuelled by record migration and low interest rates.
National property values rose nine per cent in the 12 months ended May 31, the fastest pace in 15 months and accelerating from 8.3 per cent in April, according to state-owned value Quotable Value.
Meanwhile values in Auckland, the country’s most populous city, rose 16.1 per cent in May, the fastest pace in 11 years and speeding up from April’s 14.6 per cent gain.
The country’s annual migration has broken records for nine consecutive months as people are lured by the nation’s brighter economic prospects, recording a net gain of 56,800 migrants in the year through April.
Half of the inflow are heading to Auckland, where an under-supply of housing has pushed prices to record levels.
Meanwhile, the official cash rate remains on hold, as the Reserve Bank looks to cool Auckland’s bubbling housing market using other macro prudential tools.
“The usual winter downturn does not seem to have dampened demand as high net migration, relatively low interest rates and a constrained housing supply continue to fuel demand in the Auckland market,” QV national spokeswoman Andrea Rush said.
“This demand is also now spreading to provincial centres nearer to Auckland with values up in Tauranga, Hamilton, Cambridge, Pokeno and towns in the Hauraki District.”
Property values in Hamilton and Tauranga both increased 4.1 per cent year-on-year, as demand for Auckland spilled over, QV said.
Wellington property values overall increased 2.6 per cent year-on-year, but central, east and south Wellington recorded a decline, offset by gains in Lower and Upper Hutt and Porirua.
Christchurch values increased 3.8 per cent in the year.