12-04-2010

North Shore suburbs booming

Landlords.co.nz

1. News
2. 2010
3. April

Investors in North Shore property over the last year will be pleased to see the QV statistics for the past 12 months which reveal that house values jumped by around 20%.

By Jenha White

The North Shore heavily populates the top 10 list with six of its suburbs seeing the biggest changes in property values.

QV says the suburbs of Sunnynook, Chatswood, Forrest Hill, Totara Vale, Glenfield and Hillcrest are more affordable areas.

Current average values range between Totara Vale's $434,778 and Chatswood's $669,056. They are also reasonably centrally located and close to the motorway.

"Demand has been strong for houses in these areas, combined with a general shortage of properties for sale which has tended to push prices up," says QV.

"This comes after the very same suburbs were amongst the hardest hit when the market started to decline in 2008, so the gains in the past year have in part been a recovery in values from this decline. And now all six of these North Shore suburbs have values above the previous peak of the market."

This was also the case for Kingswell, a suburb in the south of Invercargill where values took a sharp dive a year ago, but which is now on the top 10 list with an increase of 18.5% to a current average value of $157,167.

Onemana, a small seaside village near Whangamata, saw the third biggest increase in house values.

QV says Onemana is bucking the trend of many coastal communities where values have tended to remain depressed.

"It is a very small community, so it only takes a few unusual sales to affect the whole market."

Harbour View, overlooking the Hutt Valley, is also a relatively small suburb (with less than 200 houses) which saw an increase of 18.8%.

It also registers a low number of sales making it difficult to get a decent handle on the market.

The worst performing area is Taumaranui in the Ruapehu District with a decline of 11.7% in property values to the current average of $111,556.

QV says traditional investor areas have also been hard hit.

"The general lack of capital gains, difficulty in securing funding, and the uncertainty around tax changes have meant the investor market has cooled off."

Otahuhu is one such suburb in the bottom 10 with a decline of 6.7% over the last year.

QV says the worst performing suburbs are in general houses in rural centres where values have been flat over the last year.

It says after the drop from the peak of the market in late 2007, values recovered in the main urban areas, but in the rural areas stayed more or less at that lower level.

"The same applies to many holiday home and coastal communities where people have been trying to reduce debt."

"As a result the demand for properties in such areas has been very weak, so prices have been depressed."

Top 10 suburbs

Bottom 10 suburbs

Source: Landlords.co.nz