Wellington property sellers want more
Wellington’s house sellers are asking for a record high average price, Trade Me says.
In February, the average asking price for houses in the capital hit $638,000, up 13.5 per cent or $75,000 on the same time last year.
Trade Me Property’s Aaron Clancy said housing prices in Wellington had experienced ‘‘phenomenal’’ growth since early 2018 and it was expected to continue.
‘‘While homeowners will be happy, those trying to get a foot on the first rung of the Wellington property ladder will be finding it that much harder.’’
In Upper Hutt, prices were up 11.7 per cent to $558,100. Masterton was up 13.6 per cent to $428,000. ‘‘A lack of supply is driving these record-breaking property prices, with the number of properties for sale down 4 per cent on the year prior, which is making it tough for prospective buyers in the region.’’
Wellington buyers were particularly keen on urban properties such as apartments and townhouses. ‘‘These types of properties require a smaller deposit and less maintenance than a house, which is why they are popular.’’
Economist Brad Olsen, of Infometrics, said there was a supply problem driving the market.
‘‘Wellington still has an undersupply of housing, forcing those who want to buy property to bid up the price to secure a house.
‘‘At the moment, the number of properties on sale is low: data from realestate.co.nz shows that sales inventory for Wellington is down 7.7 per cent a year over the 12 months to February 2019.’’
He said comparing building consents to population growth, there could be an undersupply of about 5500 houses in central Wellington. ‘‘Two clear drivers of the population growth are both students and public servants.
‘‘Over the five years from 2013 to 2017, student numbers at Victoria University of Wellington alone have grown by 760 to 22,240 students in 2017.
‘‘According to Infometrics’ employment estimates, the wider public service looks to have grown by 1.6 per cent a year on average over the past five years in the Wellington region, with an extra 2600 workers in the area.
‘‘To add to the supply issue, the 2016 earthquake caused a double reduction in supply in some instances.
‘‘Firstly, those tenants in earthquake-damaged apartments and houses took over leases at undamaged dwellings, tightening supply. And due to the need for undamaged commercial space, a few offices which were slated to be converted to apartments were reintroduced as offices.’’
‘‘A lack of supply is driving these recordbreaking property prices . . .’’ Trade Me Property’s Aaron Clancy