Wellington residential property values have surged over recent months after an extended period, post GFC, when the market was relatively subdued.
The latest quarterly figures followed a strong December quarter which saw values rise by 6.8%. The same period also witnessed a spike in transaction activity with 2,363 sales, recorded, almost 40% higher than the last 8 years’ quarterly average.
Residential Conditions Tightening
Following the rapid increase at the end of 2015, prices continued to rise and the number of sales held at high levels in the March quarter. The latest Wellington data from realestate.co.nz shows just how rapidly residential market conditions have tightened. Sales volumes for the month of March 2016 were almost 25% up compared to the same month last year as buyer activity increased. Read more...
New projects to boost region’s economic development
A raft of new and proposed investment projects across the region encompassing transportation, hospitality, events and tourism provide good prospects for economic growth, job creation and support for a growing population. Read more...
New supply falling short
According to the latest Statistics NZ data, Wellington residential building consents for the 2015 year was up 10.9% from the previous year and sat at 1,721. The number of consents in Wellington City was 640 in the year 2015 and made up nearly 40% of the entire Wellington region in terms of residential building consents, However, Wellington City fell short of its new housing targets. The Wellington Housing Accord signed in June 2014 targeted 1,000 consent in its first year and 1,500 a year for the next four years. The accord was designed to make it possible for the Council and Government to identify Special Housing Areas where fast-track development of housing can take place with the objective to boost housing supply. The council approved 21 Special Housing Areas during the first year of the accord, however to date, developers have not responded to planning incentives and new construction starts remained below the targets.
Wellington submarket breakdown
A closer analysis of submarket trends showed that Central Wellington experienced the greatest percentage growth in the number of sales transactions between 2014 and 2015. The 31% growth rate within the city core was followed by Southern Wellington (24%), Hutt Valley (22%) and Upper Hutt (21%). It is, however, the North Wellington area which has seen the fastest value growth so far this year with the March quarter median up by 20% compared with the same period in 2015. This was followed by Central Wellington (17%) and Southern Wellington (17%), Hutt Valley (14%) and Western Wellington (14%).
Spotlight – Central Wellington Apartments
The Central Wellington apartment market experienced strong growth both in terms of sales activity and price appreciation. Transaction numbers in the sub-market were up 52% in the second half of 2015 compared to the same period in 2014. The median sales price for the last half of 2015 reached $391,250, compared to $356,500 12 months earlier, corresponding to a growth rate of 9.8%. Read more...
Spotlight – Hutt Valley
The Hutt Valley market experienced a sharp increase in the median sales value over the last 12 months. Values climbed by 13.7% or $50,000 in the first quarter of 2016 compared to the same quarter last year, reaching $415.000. Annual sales activity also increased 21.8% as 1,880 sales were recorded in 2015, which was up from a 2014 sales figure of 1,543.
Spotlight – Kapiti Coast
Value and sales activity growth has also been apparent in the Kapiti Coast area. The March quarter median reached $390,000, an increase of 6.8% or $25,000 compared to the same quarter of 2015. The total number of sales in 2015 was 10.4% up from the 2014 sales number of 1,143, reaching 1,262.
The lift in activity levels and pricing on the coast have been driven in no small part by the influence of the region’s major roading projects. Once complete journey times from the Kapiti Coast suburbs to Wellington’s CBD will be significantly reduced with this prospect already leading to a lift in purchaser interest in the area.
Read the full Marketbeat report online here.