For the first time since July last year, the QV House Price Index has shown a reduction in quarterly value growth from the previous month.

According to QV House Price Index, the average value increased 8.8 per cent nationally over the past three-month period to the end of May, down slightly from the 8.9 per cent quarterly growth NZ saw in April, with the national average value now sitting at $931,928.

This represents an increase of 23.7 per cent year-on-year, up from 21.4 per cent last month.

QV general manager David Nagel says this small reduction is particularly significant considering the QV House Price Index is a rolling average measure, which includes transactions from some of the most buoyant months earlier in the quarter.

'We can expect to see further reductions in the rate of growth as the impacts of the recent tax changes for investors and credit availability start to take effect.”

Of the 16 major urban centres QV monitors, all except the four northernmost urban locations of Whangarei and the 'golden triangle” of Auckland, Hamilton and Tauranga, have shown a reduction in quarterly growth compared to last month.

In the Auckland region, the average value now sits at $1,336,800, up 8.4 per cent over the last quarter, with annual growth of 21.8 per cent, up from April's year-on-year growth of 19.0 per cent.

However, the strongest gains in value are still mainly coming from within the centre of New Zealand.

Growth in Napier, which led the pack last month at 14.2 per cent per quarter, has reduced to nine per cent quarterly growth.

Hastings was also showing exceptional quarterly growth last month at 14 per cent, but has dropped down to 11.4 per cent quarterly growth.

Marlborough District leads the way this month at 12 per cent quarterly growth, but this is also a reduction from the 13.7 per cent quarterly growth we reported last month.

Of the major centres, Tauranga takes over from Wellington as the top performer at 10.2 per cent quarterly value growth, up from 7.8 per cent last month.

Wellington remains close behind at 10 per cent quarterly growth, down from 10.8 per cent in April.

'There's certainly plenty of signs that the heat is coming out of the market now since the March tax announcements, with a combination of investors taking a breather, first-home buyers exercising more caution and the seasonal downturn that normally accompanies the approach of winter, all contributing to a slowing market,” says David.

'But the market fundamentals are still strong with a supply shortage, combined with cheap money, still driving albeit-slowing value growth.

'Talk of interest rates potentially rising later next year, coupled with some dire price predictions from the Reserve Bank and Central Government doesn't seem to have affected the market as much as they'd have hoped.

'We'll likely see a continued slowing in the rate of price increases over the coming months as the property market finds its new normal.”

Tauranga

The average price of a home in Tauranga has cracked $1 million for the first time.

House prices here have increased by an average 10.2 per cent over the past three months and 27.8 per cent over the last 12 to post a new record-high average of $1,021,141, making Tauranga one of New Zealand's hottest cities currently for property value growth.

Despite this, QV property consultant Derek Turnwald says there's growing evidence of declining investor interest.

'In the past, investors have taken 3-4 months to react to major policy changes that impact upon them. So investor attitudes are likely to be clearer by late winter or early spring time,” he says.

Meanwhile, real estate agents have reported receiving less enquiries from New Zealanders living overseas, which Derek says is a possible consequence of vaccine rollouts and increased confidence that there is an end in sight to the worst effects of the Covid-19 pandemic.

'The Australian economy is gaining momentum again, which may attract Kiwis back over there. US and UK vaccine roll outs are going well and many highly skilled workers may be attracted to higher salaries in these countries also.”