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Wellington property market runs hot as buyers look afield

Wellington’s property market remained red hot in April after the average asking price rose 14.3 per cent or $81,000 year-on-year to $652,950, according to the latest Trade Me Property Price Index.

Head of Trade Me Property Nigel Jeffries said property prices in the capital have gone from strength-to-strength in the past few years and prices in the region haven’t dipped since 2015.

“Wellington has been the country’s quiet achiever, with Auckland hogging the headlines Wellington’s property market has been increasing considerably in the background.

“Much like Auckland, Wellington’s prices have been spreading from the middle out. With growing house prices in Wellington City, we’re starting to see traditionally quieter areas rise in popularity with property prices in the Hutt Valley and Masterton seeing the largest annual growth.

“The average asking price in Upper Hutt reached a new record in April after climbing 12.8 per cent to $583,650. The average asking price in Lower Hutt jumped 13.9 per cent to $612,500 and Masterton was up 16.4 per cent to $415,200. In Wellington City the average asking price was up 8.6 per cent on last year to $762,850 while Porirua saw a 5.7 per cent jump to $634,150.

“As we head into the cooler months, average asking prices generally slow down as buyers and sellers retreat for the winter. However buyer demand is still very high, despite the way prices in the Wellington region are going, and at the same time there are more houses on the market than this time last year (up 7.6 per cent) and interest rates are at all time lows.

“It will be interesting to see what the winter Wellington property market looks like later this year. Every indication we’re seeing is that it will buck the seasonal trend and continue to grow.”

OCR cut to boost housing market
Mr Jeffries said with the Official Cash Rate (OCR) cut and record low interest rates, it wasn’t just Wellington that could see an unusually busy winter.

“With interest rates at an all-time low and the capital gains tax off the table, we expect a boost for the housing market and we will likely see even more buyers in the second half of 2019.”

Auckland property prices fall
“As the leaves started falling in Autumn so too did property prices in Auckland after the average asking price dipped for the first time in nine months, down 0.5 per cent year-on-year to $925,800.”

Mr Jeffries said Auckland’s market was in a state of flux. “It’s an interesting time for sellers - they’re seeing dips for the first time in a long time, the market feels more volatile than it has for many years. Demand is there but buyers are unwilling to offer the sums they were throwing around a year ago.”

Despite the overall price decrease, apartments in the region are showing no signs of slowing down, according to Mr Jeffries. “The average asking price for an Auckland apartment was $706,000 in April, which is up 14 per cent on the year prior. With the average house price in Auckland at $925,800, it’s not surprising to see smaller urban properties like apartments becoming popular as they require less of a deposit and smaller mortgage repayments.”

Around the regions
Mr Jeffries said the regions were a mixed bag in April with some homeowners seeing double-digit growth, and others experience little to no change.

“Demand for property in Otago kicked into gear in April with a 19 per cent annual increase in the average number of views. The average asking price in the region rose 13.6 per cent year-on-year to $585,550 as demand for property in the region continues to grow.

“Property listings in Gisborne also experienced a surge of demand with the average number of views rising 18 per cent year-on-year, the region saw a 20.4 per cent increase in average asking price to reach $378,450.”

Mr Jeffries said Waikato was the only region to hit a new high, climbing 6.8 per cent on last year to $587,450.

“Some regions were not doing quite as well with property prices in Marlborough and Taranaki slowing when compared to the year prior.”

Mr Jeffries said the national average asking price was up 4.7 per cent on last year to $673,950.

Small houses popular
Mr Jeffries said small (1-2 bedrooms) houses continue to be a popular house type for Kiwis across the country.

“Small houses outside Auckland rose a solid 8.6 per cent on the year prior to $393,400. Nationwide small houses were the most popular in April with a 6 per cent increase in average asking price.

“Unsurprisingly Wellington is leading the charge with significant increases for medium and small houses.”

Apartments charge on
“Looking at urban property types across the country, apartments have been the hot favourite recently and saw a 12.3 per cent increase in the annual average asking price to reach a new record of $679,050.

“In the Wellington market, townhouses were the flavour of the month and saw a significant 30 per cent increase in average asking price to $603,250.

“Urban properties are attractive for a number of reasons. They often require less maintenance than a house, are in a central location and are cheaper than purchasing a house,” Mr Jeffries said.

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