Wellington real estate update – November 2018
Every month at relatable, we analyse the stats and take a deep-dive look at the Wellington real estate market.
Note: Figures below are generated from REINZ sales up to October 31st, 2018 and ‘Wellington City’ covers Tawa to Seatoun and everything in between…
The late spring rush is in full effect…
We saw a splurge of properties hit the market in October / November. Providing frustrated buyers with a little more choice than they had over Winter.
This hasn’t had any real negative effect on prices yet, as far as we can see. Most properties are still selling quickly and we are still seeing multiple offers at most Tender deadlines.
New Rateable Values released!
Earlier this month, Wellington City property owners received their new RV by post or email. In most suburbs, RV’s jumped up around 50%. This roughly reflects the median gap we saw between the old RV’s and sale prices leading up to the new values being released.
As a result, the new 2018 RV’s are more relevant. There is still massive discrepancy from house to house though. Last week we had a house sell for $171k over its 2018 RV, then another sell for $68k over its new RV. At the same time, we have already seen a few adverts on trademe from other companies with comments like ‘vendors will look at offers below RV‘.
The moral of the story is – don’t rely on an RV to tell you what a house is worth. The Rateable Value is only one part of the puzzle. To really know market value, you need to visit a number of homes in your target area, find out what they are selling for and use other tools at your disposal (like homes.co.nz, recent sales info etc) to decide where to pitch your offer.
Read more here: The 5 step home valuation method.
Will we see more new listings in the coming weeks?
A few more, but nothing like we saw in November. Owners we are meeting with now are planning to go on the market in January and February. Traditionally you will see a large number of properties hit the market straight after Wellington Anniversary weekend (19th – 21st Jan, 2019) but next year you may see a few hit trademe a week or two earlier as some owners may try to beat the summer rush.
If I was a buyer, what would I do?
A few weeks ago I was starting to feel like we may have reached the top of the cycle and be in for a steady period with prices moving forward, even possibly a slow down in demand. But the last few weeks have proven this not to be the case. Buyer interest is still strong in all price ranges, especially for well-presented homes with good info available (eg. LIM’s and builders reports). It will be interesting to see how we get on next year. Especially if the current lending restrictions are eased slightly as expected.
The best way to protect yourself when buying is to:
- Do your research.
- Buy based on emotion and logic.
- Think long-term. Eg. Can you afford to keep this home for the next 5-8 years? Property prices can vary in the short term (1-2 years) but generally go up in the long term (5-8 years). Although past performance is no guarantee of future success 🙂
- Don’t stretch yourself too far. Could you still afford your mortgage if interest rates rose by 2-4%? If not, then it may be prudent to think about reducing your level of debt (ie. buying something cheaper).
Next step: View our properties for sale. We have something for nearly everyone right now…
Also read: How to make smart property decisions.
From the coalface…
42 Rarangi Way in Owhiro Bay sold on Wed 28th November after a frantic 3 weeks of marketing. The campaign for this ‘as is, where is‘ 4 bedroom home attracted:
- 10,060 hits on trademe in only 21 days.
- 256 info downloads via propertyfiles
- 150+ phone calls.
- 42 detailed information requests
Needless to say, we are in contact with a lot of people who missed out! If you have a home that serious work, there is a market for it. Get in touch and tell us about your situation. We’ll see if we can help find a solution.
If I was a seller right now, what would I do?
Start planning for January if you have the flexibility to do so.
If you are in an urgent rush, please get in touch and we will see what we can do to help. Ideally though, we would recommend planning your campaign to start mid-late January. Now is the time to invest your energy in getting your home ready to make it shine when buyers come to visit!
Remember, you can start the process by ordering a no-obligation selling quote at any time.
‘Median % over RV’ no longer applies.
We normally show you a graph here which illustrates how sale prices are looking compared to RV’s. With the recent RV updates having come out though, these figures no longer apply. We will be able to provide updated stats relating to 2018 RV’s once we have a bit more data to work with.
If you are wondering how accurate your RV is, get in touch with us. We are happy to talk it through any time.
What about median sale prices?
The median sale price fluctuates from month to month as you can see in the chart below. The general trend right now is a slow increase over time.
Disclaimer: Past performance is no guarantee of future success.
The median sale price for non-apartment properties (eg. houses) continued bouncing around to $743k in October (down from $756k in September). This is a pretty small change though and nothing to really worry about.
Meanwhile, apartment properties came back up to $562k (up from $435k in Sep 2018). This is a big jump but the median for apartments was $551k in Aug. Interestingly, $562k is the equal best ever result for the apartment sector – matching September 2017.
How many sales went through in September?
There were 328 sales in October, up from 213 in September 2018. For comparison’s sake, there were 285 sales in October 2017.
Those 328 sales were made up of:
- 104 apartments (62 of these sales were in a development at 168 Victoria St)
- 6 home and income properties
- 171 ‘residences’ this is usually a standalone house or similar
- 36 townhouses
- 8 units
- 4 sections
The late spring rush was on show here. Traditionally September is the big selling month but this year it was a little later. Although the increase is not quite as impressive as it looks – 62 of these sales were contracts going unconditional for a development at 168 Victoria Street, skewing the stats up slightly.
Of the 328 total sales, 22 were properties with at least 1 bedroom (and a floor area of 60sqm or more) that sold below or at $500k (the current welcome home loan limit for Wellington). Although 2 or 3 of those were likely selling in that price range because of weather-tightness issues.
How long are properties taking to sell?
Median days to sell Wellington real estate:
24 days for standalone homes, townhouses and units.
18 days for apartments.
It’s a positive sign for the health of the market that these numbers are still somehow falling. When you see these numbers rapidly increasing, it’s probably a sign the market is starting to slow down.
If you own a reasonably attractive property, you are looking at 2-3 weeks of total market time to find out what it’s worth in the current market.
Note: The only reason the ‘days to sell’ numbers aren’t even lower is the prevalence of deadline sales and tenders being used to market Wellington properties. These selling systems keep properties on the market for 2-3 weeks when they might otherwise sell faster. But as we have noted before, that extra time on the market can really benefit sellers.
What is the best way to sell?
You would be crazy not to use a deadline (ie. Auction or tender).
Out of 328 total sales, 103 were sold by tender or auction. The median result for both of these selling methods was 57% over RV.
The median result for ‘Private Treaty’ which basically means, every other method: 48%.
Note: The percentages over RV don’t apply to the new 2018 RV’s but the comparison between selling methods can still provide us with useful information.
If getting the best possible price is important to you then hiring the right agent who knows how to manage a fixed date process is essential. So is making sure you expose your property to the entire market (by not selling it too quickly).
Note: The 3rd category in the chart above, ‘private treaty’ includes everything that wasn’t sold via auction or tender, including properties marketed with a price, BEO, deadline sale, by negotiation etc. This category will include properties that were originally marketed as tenders or auctions but didn’t sell by the initial deadline.
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