Where is the Wellington real estate market heading?
Every month at relatable, we analyse the stats and take a deep-dive look at the Wellington real estate market. Our goal is to help you make informed property decisions.
Writing this report in late July / early August, it’s fair to say that Wellington is running its usual course. We often see a big rush of sales in February / March as that is the time most owners choose to go on the market. There was such a big up-tick in properties for sale earlier this year that we thought the market was starting to turn.
Then Winter comes along and most potential sellers put off their moving plans for 3-6 months while the cold weather kicks in. This creates a big drop in the number of properties for sale, putting upward pressure on prices.
This can create a rewarding situation for owners who are prepared to brave the cold as fewer properties available for sale results in increased demand for any good houses that are available.
Where are we headed from here?
My educated intuition tells me we are in for a steady market over the next 6 months, with the possibility of some further value gains. Taking capital gains tax off the table really slowed the flood of investment properties coming on the market (lowering supply), while historically low-interest rates are making money extremely cheap to borrow (increasing demand). Banks also seem keen to lend to both first home buyers and investors, with rumours of a relaxation of the RBNZ loan to value ratio requirements in the pipeline.
Scroll down to find out how much above RV houses are selling for, how much Welllington properties cost ‘per SQM’, days to sell info and more…
Median sale price:
Houses / townhouses / units: $745k
Comment: Certainly the median sale price isn’t pointing towards a slowing market. This sort of fluctuation is pretty standard from month to month. With a median sale price of $745k (excluding apartments), properties in Wellington certainly ain’t going cheap!
Median % over RV
Houses / townhouses / units: +4%
Comment: The big dip in the chart above is due to new RV’s being released in Wellington in Nov 2018. The new figures (4% above RV) reflect what we are seeing out in the marketplace: Most properties are selling slightly above their new RV but the results vary massively from house to house, with some houses selling below RV and some selling well above. RV’s are an inexact science at the best of times.
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.
Median days to sell:
Houses / Townhouses / Units: 32
Comment: An interesting increase-trend here, it’s pretty unusual for this number to get over 30 in Wellington. I would have said this was a sign the market was turning but I think we will see these numbers fall in August as the tighter Winter market creates more of a rush for any new listings that come on the market (and ones that haven’t already sold).
How expensive is Wellington per Square Metre?
Houses / townhouses / units: $5,282 per square metre (of building floor area)
Apartments: $7,583 per square metre
This is a new stat we are tracking to see if our clients find it useful. For more info on this subject, read: Why don’t we track price per SQM in NZ?
What is the best way to sell?
Comment: Tender is still consistently outperforming other sale methods.
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).
Click here to order an online quote from our team.
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.
In June, there were 224 total sales…
1 lifestyle block
8 home & incomes
133 ‘residences’ which usually includes your typical standalone home.
Of those 224 sales, 32 were under $500k and over 40 sqm, but only 6 of them weren’t apartments. So if you are looking for a home under $500k, that’s not an apartment, pickings are very, very slim indeed.
Next step for buyers:
Hang in there! Keep scouring trademe for your ideal home. Stay tuned for more properties we have coming on the market next week and keep reminding yourselves that there will be a big rush of new listings in Spring!
Next step for sellers:
Don’t miss a single step in the selling process. Fill in your details below and download our:
“41 step preparing for sale checklist”
Or request a no-obligation selling quote online.