Nationwide residential property values for August have increased by 4.8% over the past year –the slowest annual rate since August 2012, according to the latest QV House Price Index.

Over the past three months, values rose by 1.2% and the nationwide average value was at $641,648, up by 54.9% from the previous market peak of late 2007.

When adjusted for inflation the nationwide annual increase was down to 3.0% and values were up 29.3% from the 2007 peak.

“A lack of listings over winter, LVR restrictions and stricter lending criteria by retails banks have led to a 30% drop in market activity and sales volumes compared to the same time last year,” QV national spokesperson Andrea Rush said.

“Quarterly value growth has dropped across the Auckland and Wellington Regions, but values rose in most other parts of the North Island including Hamilton and Tauranga,” Rush said.

According to QV, values are now rising in East Coast areas including Gisborne and Wairoa, as well as central North Island areas such as the Ruapehu District and Whanganui – areas that have not seen strong growth for many years.

However, in Kaikoura, values decreased 5.5% over the past three months following the earthquake event.

Rush said general elections also traditionally compound any annual winter slow-down in the housing market, due to uncertainty caused by potential policy changes.

“It’s likely the annual spring upturn in the market may be slower to arrive given the pending election but with the underlying drivers of a lack of supply and high net migration particularly in Auckland still remaining, it’s possible that values may begin to rise again more steadily in the new year.”

Source: NZAdvisor