Wellington house prices are slowly “bouncing back”

Wellington Market Update | April 2024

Wellington house prices are slowly “bouncing back” in the face of a challenging economy, Tommy’s Real Estate Sales Director Tim Clark says.

The latest QV House Price Index report shows Wellington was second only to Queenstown for house price growth in the first quarter of 2024.

“Of the main urban areas we monitor, Queenstown experienced the most growth this quarter at 2.7 percent, with Wellington and Christchurch not far behind on 2 percent and 1.5 percent respectively,” QV says.

“Once again, Kapiti (5 percent) has recorded the largest average increase in home value, followed by Upper Hutt (3.8 percent). Home values also increased on average in Wellington City (1.9 percent), Porirua (0.7 percent), and Hutt City (0.4 percent) but at a slower rate than the national average (2.2 percent).” “At Tommy’s, we are seeing property prices bouncing back, albeit, at a slower pace,” Tim says.

“There are many multi-offer situations happening which makes those sales competitive and therefore maximising the price that the current market is willing to pay.

“It is also important to note that Wellington had the largest price correction from the heights of late 2021.”

Tim also echoes what other commentators have been saying: housing market confidence has improved in the last six to nine months but both buyers and sellers face key challenges, from high-interest rates and tighter credit to an avalanche of listings reducing competition for houses amid a technical recession.

“There are some tough economic headwinds ahead for New Zealand for sure,” Tim says, “and the much-talked-about factors such as housing affordability, public service cuts, higher interest rates, and tougher lending rules will have an impact in the local market. “However, there will be a difference between the perceived impacts and real impacts, in that the market will continue to transact as it always does — but there will be pockets of difficult times for some people.

“Overall, at Tommy’s, we remain optimistic about the future and feel we have returned to a more normal market which is a good thing overall, especially when the last five or so years have not been normal.”

Tim says first-home buyers remain the largest pool of buyers. “However, we are seeing a slow and gradual return of investors as well.” This follows the Government re-introducing mortgage interest deductibility for investors and the bright-line test reducing from 10 years to two — which means that from July 1, only investors who sell a rental property within two years of buying it will have to pay tax on any gains received. “The current market, whilst being a more normal market, does favour buyers a little more,” Tim says.

“So, it is imperative for sellers to present, promote, and price their properties properly to achieve a successful sale. “Of course, a major factor to a successful sale is also to engage the best real estate agent.”