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Largest-ever annual increase: Wellington house prices rise 24% in a year

News from Trade Me Property
Wellington house prices sky-rocketed in June, seeing the largest annual increase on record, according to the latest Trade Me Property Price Index.

Trade Me Property Sales Director Gavin Lloyd said the average asking price in the Wellington region saw some ‘eye-watering’ growth last month, climbing 24 per cent on June last year to a record-breaking $864,000. That’s an increase of $166,300 in just 12 months.

“June marks the fourth consecutive month where we’ve seen property price growth of 20 per cent or more in Wellington. The fact is, the Wellington property market is now running hotter than any other market we’ve seen before, including Auckland.”

Mr Lloyd said a lack of properties for sale was driving price increases in the region. “Supply has long been an issue for the Wellington market and in June the number of houses for sale was down 13 per cent on the same time last year.”

Taking a closer look at the region, Wellington City saw the smallest annual growth of all the Wellington districts, climbing 15 per cent to a record-breaking $943,900.

“With the average house price in Wellington City closing in on a million dollars, it’s no wonder we’ve seen Kiwis in the capital look further afield in search of cheaper house prices in exchange for a longer commute.”

Mr Lloyd said South Wairarapa saw the biggest price jump in the region with the average asking price up 39 per cent on last June to a new high of $784,550. Masterton (up 32 per cent to $629,700), Carterton (up 30 per cent to a record-breaking $699,450), Kapiti Coast (up 29 per cent to a new high of $876,650), Porirua (up 21 per cent to $885,250), Lower Hutt (up 26 per cent to a record-breaking $836,700), and Upper Hutt (up 27 per cent to $821,950), all saw significant jumps in average asking price.

However, Mr Lloyd said this rate of growth was unsustainable. “While there are yet to be any signs that the Wellington property market is slowing down, this huge price growth simply cannot continue forever.”

Auckland prices pick up pace

“Following Wellington’s trend, the average asking price in Auckland saw the biggest price growth ever in June, jumping 16 per cent year-on-year to an all-time high of $1,089,300.

“Just when it appeared as though price growth was easing in the Auckland market, prices have taken off yet again with a record-breaking annual increase of almost $150,000.”

Mr Lloyd said Auckland City saw a 13 per cent jump in average asking price to $1,216,900, Manukau City reached a new record following a 15 per cent increase to $1,025,150, and North Shore City rose 14 per cent to $1,271,350.

“Demand for Auckland properties fell 21 per cent on the year prior while supply was down 10 per cent.

“After a year of solid price growth, we know that some prospective buyers are struggling with the fear of missing out (FOMO) and that’s causing them to dig deep into their wallets, and prices to spike.”

New Zealand house prices reach another record

“The national average asking price also saw the largest annual increase we’ve ever seen in June, climbing 18 per cent to an all-time high of $826,200.”

Mr Lloyd said every region in the country apart from Gisborne, Northland and Otago reached a record average asking price in June with many experiencing strong double-digit growth.

“Marlborough (up 30 per cent to $622,900), Manawatu/Whanganui (up 26 per cent to $570,700 and Wellington (up 24 per cent to $864,000) were the standouts in June.”

Small houses the pick of the bunch

Mr Lloyd said nationwide, small houses (1-2 bedrooms) saw the most price growth of any house size in June, following a 23 per cent annual increase to a record-breaking $624,900.

“Medium (3-4 bedrooms) and large houses (5+ bedrooms) also reached a new high after some solid double-digit growth.”

Mr Lloyd said when it came to urban properties like apartments, townhouses and units, townhouses were the hot favourite. “The average asking price for a townhouse in New Zealand rose 22 per cent on June last year to an all-time high at $796,200.”

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11 comments:

  1. Peter Steven, 23. July 2021, 11:53

    I can’t wait for the tipping point (but I will…)

     
  2. Claire, 23. July 2021, 15:22

    Looks like affordable housing in Wellington, even with six-storey buildings, is a pipe dream.

     
  3. Ray Chung, 23. July 2021, 17:26

    Six-storey or any multiple-storey housing will never be cheap. The higher you build, the more expensive per square metre as the cost of the building material, foundations etc also increase exponentially. Sure, there’ll be more housing, but those who say they’ll be “affordable” are dreaming.

     
  4. K, 24. July 2021, 0:33

    Ray Chung, that’s simply not true. Look at all the new apartment developments in Wellington – the cheapest prices for a property are in these tall towers. The lower the structure (eg townhouses, low rise developments etc) – the more expensive the properties are. I have an acquaintance who picked up a brand new apartment in the just completed Ramada apartments on taranaki street for less than $500k. Absolute bargain.

     
  5. Claire, 24. July 2021, 9:34

    K: how big is the Ramada apartment? what are the extra costs? (ie body corporate fees can run to 8 grand). One-bedroom apartments were averaging $700,000. So your friends must be tiny.

     
  6. Light switch, 24. July 2021, 10:27

    K and others – you might find this article from eye of the fish informative.

     
  7. Claire, 24. July 2021, 11:19

    Light switch: Thanks. These facts have been repeated time and time again in response to the cry of affordability, used by councillors to dupe young people. Have prices suddenly become affordable in Auckland? NO. And they have been building flat out for at least five years.

     
  8. Ray Chung, 24. July 2021, 20:22

    Hi K, I still maintain there are significant costs in addition to the purchase price. I looked at those apartments and recall that there’s quite a few issues and additional expenses. Are they unit titled? The Body Corporate will be a significant cost as there are a lot of common expenses including the lifts and maintenance of common areas.
    Light switch: many thanks for this link. Councillors who recommend high and medium density apartments really do not know what the full costs are. Banks will loan less and at higher rates for apartments because of the greater risk and expenses and I believe they won’t lend on apartments under 50 sq.m. I hope your friend is happy with their purchase but I didn’t put it into the absolute bargain category.

     
  9. Claire, 25. July 2021, 9:26

    Ray: banks have recently changed lending – 38 sqm is the cut off now.
    Banks have kept people from buying houses with the ridiculous deposits needed. They are creaming it basically! A new product where deposits are lower is needed.

     
  10. Joolz, 25. July 2021, 12:33

    What does it take to end the real estate Ponzi scheme that permits the tendering process to be dominant over auctions in Wellington. The idea that you tender what you think a property is worth, devoid of context, is straight up price-gouging. How did this situation come about and why is no journalist investigating? That alone has to account for a significant chunk of the 24% increase in the value of Wellington properties.

     
  11. Chris Calvi-Freeman, 25. July 2021, 20:07

    Joolz – add to that, the fact that you can never be sure that if you put in the highest offer in a closed tender, you’ll secure the property. It’d be very easy for the agent to open all the tenders and then contact a “favoured” client and invite him/her to bid just a little more to secure the deal. Not saying it happens frequently, or at all, but clearly there’s an opportunity if an agent is dishonest. At least with auctions, there is clarity.

     

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