House prices continue to soar; biggest gains in entry-level properties - QV

QV says its latest data shows "precisely how difficult it has become since lockdown for Kiwis to take their first step on the property ladder". File photo / RNZ

By RNZ

New house price figures show the average price of entry-level properties in Ruapehu has increased by more than 70 per cent in the last year.

The latest Quotable Value (QV) Quartile Index showed the rise in the central North Island district was by far the largest price increase for homes in this bracket of anywhere in the country.

The next biggest jumps were in Buller, where there was a 55 per cent increase, and Southland, where the increase was 47 per cent.

In the main centres, the biggest increases were in Hutt City, Napier and Palmerston North.

Increases in those areas were between 30 and 35 per cent.

The QV statement on the latest index said of the main centres, the five biggest price increases in the last 12 months all occurred in homes at the lower end of the market, i.e. the least expensive quarter.

QV went so far as to say the data showed "precisely how difficult it has become since lockdown for Kiwis to take their first step on the property ladder".

QV general manager David Nagel said: "It's no wonder that first-home buyers have been feeling so hard done by.

"Just look at the size of those capital gains, which have been driven up, up, up by a lack of supply and a whole lot of competition between other first-home buyers and property investors."

An opportunity for first-home buyers?

The figures did suggest price pressure may be shifting from the bottom quarter of the market to the top, QV said.

Nagel said there may be a slight cooling at the bottom of the market in coming months as investors took a pause to weigh things up.

"This pause may give many first-home buyers the opportunity they need to get on the property ladder, but it's hard to see prices coming down in a hurry, given that there's still so much demand and not enough supply.

"Meanwhile, price pressure will concentrate further up the property ladder," he said.

First Home Buyers Club's Lesley Harris told Midday Report she thought the price drive at the lower end was simply demand.

"It's a very, very popular end of the market."

She did not think the Government's latest measures would make the market any easier for first home buyers.

"Making it tougher for investors does not necessarily transpose to someone finding it easier to getting a mortgage."

- RNZ