Suburbs and towns throughout Otago made some healthy quarterly gains on house values, but Central Otago stole much of the limelight in percentage gains over the longer term.
Government agency Quotable Value's Dunedin-based registered valuer, Duncan Jack, said the increased confidence in the market was ‘‘certainly being helped'' by the record low interest rates, loosening of the LVR (loan to value) lending restrictions on banks for regional areas and accessibility to funds, such as KiwiSaver, to help with deposits.
‘‘These conditions are likely to be encouraging first-home buyers and increasing competition in that sector of the market. The positive knock-on effect of that almost certainly affects the second- and third-home buyers in the mid-upper value sectors,'' Mr Jack said.
QV national spokeswoman Andrea Rush said Queenstown's property market continued to be strong,
with high levels of activity and demand.
Property investors remained active in Queenstown, with a noticeably higher number of Aucklanders present, and there was also solid interest from overseas investors, in particular China and Australia.
There continues to be high demand for homes at the affordable end of the market and that was now flowing over into higher-end properties, which are now also seeing value growth and increased demand.
Fernhill values rose the most year on year, with the average value up 13.8% to $587,500.
Frankton values continued their upward trend of the past couple of years, rising 11.2% year on year to an average $635,550.
Arrowtown homes also continued to show strong value growth, with the average now $827,950, Ms Rush said.
‘‘The current boom in the tourism industry has seen high demand for accommodation in Queenstown.
‘‘This is resulting in extremely high occupancy rates in the furnished apartment market and has led to an increase in rents,'' she said.
The increase in rentals, coupled with occupancy rates being higher than expected, was bringing higher returns to owners of furnished apartments and making the market more attractive to investors, Ms Rush said.
House values in Wanaka continued the upward trend seen over the past couple of years, rising 7.8% year on year to an average $766,250.
The Cromwell area is also experiencing an increase in demand and activity and values there were also on the rise, she said.
Year on year, all Dunedin locations were showing positive growth, with only two places showing very slight negative growth in the three months to September 30.
While most of the quarter to September gains were in the 1%-2% range, locations in Dunedin showing the greatest growth during the previous 12 months to September were Maori Hill, up 4.5%; Wakari, 4.9%; Northeast Valley, 5.0%; Mornington, 6%; and St Kilda, which was up 6.4%.
Mr Jack said ‘‘The sought after suburbs, such as Maori Hill and St Clair, continue to perform well, as does Mosgiel, with the majority of buyers likely to be second, third or fourth-time buyers, as value levels are often within the mid to upper ranges.''
North Dunedin continued to attract many investors, with the student rental market remaining strong, an observation also reported by other real estate agencies in recent months.
Mr Jack said Northeast Valley was also attracting investors for the same reasons, but that area was also buoyed in part by the first home owner market.
‘‘Purchasers appear to be a mix of local and out of town buyers, whether investors or owner occupiers,'' he said.
There were a number of locations within Dunedin showing more than 2% growth for the quarter to September, with St Clair up 2.1%, Caversham and Mosgiel both up 2.2%, North Dunedin, 2.5%, Maori Hill, 2.7% and Northeast Valley, up 3.1%.
Mr Jack said there were other suburbs showing solid growth, year on year, like Wakari, Mornington and St Kilda, which were likely to be buoyed by the first home owner market
‘‘Those locations have many good well maintained dwellings in the low to mid value ranges,'' he said.
Mosgiel also benefited from the first home buyer market, with the area having a mix of dwelling types.
