Buyers and sellers are being told not to worry about the recent drop in Wellington property valuations with an agent describing them as 'all over the show'. Photo / Mark Mitchell
Buyers and sellers are being told not to worry about the recent drop in Wellington property valuations with an agent describing them as 'all over the show'. Photo / Mark Mitchell
Real Estate agents are seeing signs of recovery in Wellington’s housing market after one property attracted 17 offers and sold for 18% above its RV.
Those in the sector say RVs have never been accurate and well-presented homes are still attracting good prices in the current market.
A Wellington real estate agent says there are signs the market is picking back up with one property recently attracting multiple offers and selling well above its rateable valuation.
The capital’s housing market has experienced somewhat of a boom-and-bust cycle in the past three years, with valuations reaching record highs in 2021 before plummeting last month.
House values have fallen between 12.1% and 29.3% across every suburb in the past three years.
The average Wellington house value is now sitting at $1.08 million.
QV chief operating officer David Nagel said the “steep decline” in valuations started in 2022, influenced by “higher interest rates and tighter credit conditions, as well as a higher rate of inflation and unemployment“.
One agent says buyers are flocking to well-presented homes. Photo / Mark Mitchell
Billy Bell from Tommy’s Real Estate told the Herald despite the doom and gloom, the market was doing just fine, citing a recent listing that had buyers arriving “in flocks”.
The two-bedroom, 1900s weatherboard home in Berhampore was listed through a 16-day tender campaign.
In 2021 its rateable value was $1.16m. That dropped more than 25% to $860,000 in February.
Bell said despite the drop, the house ended up selling on February 27 for more than $1m. He said 56 groups viewed the property and 17 offers were made.
Bell said while buyers have a lot of options at the moment, with more than 1000 current listings, he’s seeing people flock to properties that are “well presented”.
“Buyers have choice, and they’re going after the real good ones.
“Great properties always sell no matter the market, but I think what it does mean if you’re listing your property do spend your time on the painting, do spend your time on the upkeep.
“It’s not 2021, let’s put it that way, you’ve got to put in the work. But if you put in the work, the results come.”
Tommy's Sales Consultant Billy Bell says things are improving and buyers are flocking to well presented homes. Photo / Tommy's.
Bell said they’ve observed an uptick in the number of first-home buyers in the market in the past three to six months.
“The market is fine, we sold 70 houses last month, on track for 80 houses this month.”
Bell’s advice for those looking to buy or sell is not to worry about the recent drop in valuations, calling them “all over the show”.
He said some properties recently sold by Tommy’s have gone for $400,000 over RV, while others have sold up to $100,000 below.
“RVs have never been accurate, you can modernise your home without the council knowing, adding big improvements and your RV won’t go up.”
On average, the value of residential housing in Wellington has decreased 24.4% since 2021. Photo / Mark Mitchell.
Property investors, Bell said, were starting to sell up and leave the market because their costs had increased, but the amount they can charge has gone down.
He said he’s seeing many former rentals hit the market as landlords decide to get out.
Anji Foster, a partner and saleswoman at Wellington’s Lowe & Co, also believes things are moving in a positive direction. She said she was seeing a “more balanced marketplace than we have been in a while”.
“We are noticing some shift to multiple offers coming in on some properties, but it’s not across the board.”
Lowe & Co consultant Anji Foster has teamed up with her son, James Lowe, and says the pair are seeing more interest as the market improves on last year. Photo / facebook.com/anjifosterproperty.
Cheaper areas like Newlands, Johnsonville, and Tawa are getting “early traction”, Foster said, with high interest and multiple offers on properties from first-home buyers.
In the city, newly renovated “turn-key” properties are also doing well, compared to those that need more maintenance.
Foster, who has teamed up with her son James Lowe, said the number of people coming through their open homes is certainly “healthier” than last year, with more first-home buyers showing an interest.
“There’s definitely more buyers in the market right now”.
Agents say there has been an increase in attendance at open homes since last year. Photo / Mark Mitchell
As well as the drop in interest rates, Foster said the high supply of properties is also a large factor in the market’s recovery.
“People have sat back and decided not to sell their homes in the last couple of years just because everything they were reading indicated it probably wasn’t a super time to sell.
“It almost feels like a lot of those pent-up listings have come on now.”
The recent rateable valuations are closer to market value than that of the previous 2021 valuations, Foster said, but is reminding sellers that the valuations are always somewhat “out of whack”.
“I’ve never known new RVs to cause such a shock wave through the market.”
However, things are different for investors. Wellington mega-landlord Matt Ryan told the Herald that while he believes the residential market is doing well, things are hard for landlords.
Wellington landlord Matt Ryan says he is still buying rentals, but believes it's a challenging time. Photo / Mark Mitchell
Ryan says he’s observed strong interest in family homes at auctions he’s attended recently.
“I think the residential market is starting to bounce back quite nicely”, he said.
At the same time, Ryan said investors have left “en masse” over the past three years, describing Wellington’s housing market as the most challenging in the whole country.
He says the recent RVs haven’t changed much for investors, compared to other factors like public sector job cuts and increased costs through rates and insurance.
“Rents have been tough in Wellington for landlords, which is the opposite effect of what we had a few years ago when tenants were queuing down the road to see properties, now the tenants have got a plethora of choice.”
Ryan believes some rents, especially for larger flats, have decreased between 30-40%.
Urban housing in Newtown, Wellington. Photo/ Mark Mitchell.
Ryan said he’s not leaving the market and while his strategy is to hold on to properties, he isn’t buying at the rate he was previously.
In 2023 Ryan was reported as owning more than 100 properties in the Wellington region. He said he owns even more now, but in the past 12 months, he’s only purchased another eight rentals compared to the 48 he bought in 2021.
“I still love this city and I still want to invest in this city, I’m a real loyal Wellingtonian but this is a challenging time.”
Ethan Manera is a multimedia journalist based in Wellington. He joined NZME in 2023 and is interested in local issues, politics and property in the capital. Ethan is always on the lookout for a story and can be emailed at ethan.manera@nzme.co.nz.
