News & Research
The story of Wellington property ownership: we take a look beyond the numbers14 March 2017
The QV House Price Index for February shows that the wider Wellington Region continues to rise, with home values up 21.5% year on year and 4.3% over the past three months. Values are now 29.4% higher than in the previous peak of 2007.
The average value across the wider Wellington region is now $589,784 with the Hutt Valley the obvious stand-out performer. Upper Hutt values increased the most at 25.5% year on year and 6.3% over the past three months, while Lower Hutt is only slightly behind at 25.0% annual change and 5.8% quarterly change.
Our Buyer Classification data indicates this is heavily influenced by first home buyers, who tend to pay a premium compared to other types of buyers, increasing their activity levels across the area.
In fact, the strength in first home buyer activity for the Wellington region is continuing and is now at record high levels, representing over 30% of all current sales.
However, it’s a different story for both mover and investor activity in Wellington, which is at the lowest level for many years. We will need to wait at least another month before we can claim this to be a new trend, but at least for now it appears that the lending restrictions are hitting other buyers in Wellington more than first home buyers.
“First home buyers remain very active in the region, likely taking advantage of KiwiSaver funds for deposits and also adjusting their expectations to get on the market – opting for properties further from town or smaller than they’d otherwise prefer” commented Senior Research Analyst Nick Goodall.
There remains a serious shortage of properties on the market in Wellington with the total number of properties currently on the market 27% below the same time last year.
Further north and the Kapiti Coast is also experiencing significant growth with strong buyer demand, likely off the back of improved transport lines to/from the Capital. Home values here have risen 21.5% over the past year - but this rate of growth has flattened off recently with the quarterly change now 3.4% after peaking at 7.3% in December 2016.
Movers are a significant part of the market here, typically overshadowing investor sales; however more recently investors have increased their presence with 37.0% of sales to this group, compared to 34.5% going to movers.
Getting back to the Capital now: Mayor Justin Lester announced this week that from 1 July 2017, all new build homes and apartments will qualify for a $5,000 rates rebate. It’s a strategic move to help alleviate housing stock pressure and incentivise construction of new homes for Wellington - especially for young families and people looking to get into their first home. We will be watching with interest to see the actual impact that this new policy has.