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Bayleys Research


WELLINGTON RESIDENTIAL REPORT 2008

MAY 2008

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WELLINGTON REGION

Wellington, New Zealand’s capital city has a thriving employment industry and expanding government sector. Voted the 12th best location in the world in which to live by Mercer’s Quality of Living Survey for the last two years, and the number one holiday destination by Conde Nast Traveller magazine in 2005, the region has attracted many new residents. As a result of the expanding economy and popularity of the area, the Wellington residential market has performed well over the past five years.

The New Zealand residential market entered a period of strong price growth between 2002 and 2007 and this is also reflected in the Wellington residential market which experienced value growth of 68% during this time. In 2007 the median sale price steadily tracked upwards to sit at a record high of $480,000 in the December 2007 quarter. However, in the September 2007 quarter values faltered slightly and this may have been an early insight into the 2008 market conditions. The March 2008 quarter results released by the Real Estate Institute of New Zealand (REINZ) show a drop in values to $465,000. Anecdotal evidence from the market so far this year also suggests that a number of vendors are dropping their asking prices in order to achieve a sale.

 

 

There is an overall weakening of the New Zealand residential dwelling sales volume which is not surprising given the high interest rate environment that is currently prevalent. Sales volume for the Wellington region began a gradual decline from the December 2006 quarter to reach a 5 year low in the September 2007 quarter of 785 transactions. Although the December 2007 quarter made a come back at 1,049 transactions, the downward trend continued into the first quarter 2008 to a set a new five year low at 699 transactions. This represents a 55% drop in sales volume since March 2007.

The average days on market figure shows a seasonal trend with the lowest days on market occurring in the December quarters and peaks in the March and June quarters of each year. The December 2007 quarter recorded 37 days which is in line with the same quarter in the two preceding years, however a substantial rise is expected in 2008 as purchasers begin to take more time over their purchasing decisions.

 

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