What’s happening in the Wellington property market?

It has been a tumultuous time for the Wellington Property market over the past 18 months. Average asking prices have been some of the hardest hit in NZ, with a drop of 19% from their peak. Renters in the capital city have also been hit in the pocket with rents soaring to a record median weekly high of $680 in January. That was $50 higher than the national average rent.

While we saw signs of a recovery earlier this year, the change of government and their focus on public sector job cuts along with high interest rates, have meant that May average asking prices again started to dip to $857,800, that’s a 2.3% dip on the month prior.

Where are Welly house hunters looking?

One constant trend both pre and post-Covid is Wellingtonians looking for either more space or more value than what can be found in the Wellington CBD. The opening of Transmission Gully has increased demand for the Kāpiti Coast. With flexible working now the norm, the lure of a beachside lifestyle, a bit more warmth, newer properties and better value have a lot of first-home buyers setting their eyes on the Coast. For these reasons, Kāpiti Coast average asking prices have only dipped by single digits, rather than the double-digit drops of the Wellington market.

The same can be said for Upper Hutt. The effects of public sector job cuts are yet to be seen in the property values up the Hutt River. Average asking prices in Upper Hutt are still growing, with April and May figures up 10.96% and 4.9% respectively.

Wellington rental prices

For renters, there has been very little to celebrate. Wellington remains one of the most expensive places to rent in the country. Rental stock is constantly under scrutiny and supply, in particular, student accommodation has been exceptionally low - 10% down on previous years through the first few months of this year. However, the national median rent has stayed at $650 for the past three months with supply starting to increase.

So what next? Certainty is always a trigger for any recovery in the NZ Property Market and while this might not be on the short-term horizon for many in Wellington, longer term the picture is brighter. Later in the year, the dust will have settled on the government's focus on public sector roles and we could potentially be looking at the prospect of falling interest rates. Add those together and it shouldn't be long before we see gains in average asking prices in the Wellington market. I expect the attraction of both the Kāpiti and Upper Hutt markets to continue.

Author

Gavin Lloyd

Sales Director, Property - trademe.co.nz

Gavin Lloyd is a seasoned professional in sales and business development, driven by a passion for creating high performing teams and achieving growth. With over a decade of experience in the property industry, Gavin consistently showcases his expertise in crafting and executing strategic plans that yield tangible results. His extensive background in the online space, affords him an in depth perspective on this ever-evolving business landscape.

Gavin actively engages in the real estate sector, leveraging his profound insights through presentations and active participation in roadshow events. Gavin is also a regular contributor in news spots and radio broadcasts. As the Director of Sales at Trade Me Property, he continues to evolve and adapt alongside his team, ensuring that the information and value they offer remain pertinent, supportive, and instrumental in driving positive change.