Wellington housing market: Median house prices see 27.7 per cent increase

The pressure on Wellington's housing market continues. Photo / Mark Mitchell

Wellington's red hot housing market shows no sign of slowing down, with median house prices in the capital increasing 27.7 per cent in the past 12 months.

Data released by the Real Estate Institute of New Zealand (REINZ) today showed the median house price in Wellington was $792,000 in January 2021, up on $620,000 a year ago.

Last month 19.7 per cent of homes in the capital sold for $1 million or more, up on 9.9 per cent in January 2020.

Other districts in the region also hit record median house prices, with $700,000 in Carterton, $860,000 for the Kapiti Coast and $800,000 in Lower Hutt.

Wellington also saw its lowest January volume of house sales ever - despite the country showing its strongest January in five years.

REINZ Chief executive Bindi Norwell said the variance around the country showed regions like Wellington simply did not have the housing stock to meet the demand.

"Regions with solid levels of new listings back in November and December are now benefiting from an uplift in sales volumes, whereas those with chronic low listings and total inventory shortages – such as Taranaki, Manawatu/Wanganui and Wellington – are now starting to see this impacting the market."

She said the pressure on Wellington's housing market was likely to continue until more homes were built.

"There's a lot of people wanting to buy properties, there's just not enough to keep up with demand.

"We'll probably see this continue for the next six to 12 months until we can build more houses to keep up with the demand."

Wellington had the second lowest median number of days to sell a property, at 37 days, behind the West Coast at 25 days.

Nationally, the medium number of days to sell a property decreased seven days to 35.

REINZ figures show another jump for Wellington house prices. Photo / Mark Mitchell

"We've got the lowest days to sell in January for 17 years," Norwell said.

"It's down to 35 days across the country and that means things are happening much more quickly, people are buying properties much more quickly."

Across the country there was an uplift on December's inventory level - the lowest level ever – but Wellington had the third lowest with seven weeks' inventory, behind Manawatu/Wanganui and Taranaki.

However this was the first time in six months that Wellington hadn't had the lowest inventory in the country.

OneRoof editor Owen Vaughn said the data released by REINZ supported the narrative of a "red hot" market with no indication of slowing down.

"Yes the Reserve Bank's brought in the LVR restrictions … that may have a softening effect on prices in some areas but for the next couple of months I don't see the market slowing down to any degree."