What’s happening with New Zealand’s first-home prices?

First-home prices have increased this quarter, according to the latest figures from Quotable Value (QV).

The latest QV quartile index, which tracks residential property prices and sales at both ends of the market, found that first-home prices rose even further on average in the April quarter compared to last.

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And according to QV, of the 16 major urban centres that it monitors, first-home prices have been rising fastest in Napier. The Hawke’s Bay city saw the average price of a first-time home on the lower end of its market increase by 17.47% to $550,360 in the April quarter. Meanwhile on upper end of Napier’s housing market, the average price increased by 15.68% to $1,188,128.

David Nagel, general manager at QV, said that prices for entry-level homes have risen despite “growing evidence to suggest that significant numbers of investors have hit pause following the Government’s recent tax changes.”

Figures from QV also found that the difference between average price growth in the upper and lower quarters of the residential property market in the April quarter was less than half a percentage point – which it says is “down from 0.9% and 0.6% in previous months.”

“The gap isn’t narrowing because any heat has come out of the lower end of the market yet. It’s narrowing because next-home buyers have been feeling confident enough to make the most of low interest rates and previous capital gains to up-sell their home for something better,” said Nagel. “Expat Kiwis returning from overseas continue to play a prominent role in the housing market too. They’re not confined to one end of the market, competing with first-home buyers at the lower end of the market and also with next-home buyers further up. It’ll be interesting to see whether these Kiwis will stay put when the world slowly begins to open up again or whether we’ll see more stock become available as they head off on their next adventures.”