Two capital suburbs hit $2m mark

Wellington now has two $2 million suburbs, as property valuations in exclusive parts of the city jump significantly – bucking a national trend that has seen ‘‘affordable’’ homes attract the largest growth in capital gains in the past few months.

The average house in the seaside suburb of Oriental Bay/Roseneath is worth $2,190,324 and properties in Seatoun are valued at about $2,054,674, the latest analysis from Quotable Value (QV) shows.

Oriental Bay/Roseneath became part of the $2m club at the end of the March quarter, and Seatoun caught up in the past month.

Kelburn, Mt Victoria and Thorndon are hot on their heels, with averages values of $1,541,041, $1,463,245 and $1,463,176, respectively.

‘‘In the rest of the country, the lower end of the market is pushing on really strong. Wellington is the opposite,’’ QV area manager Paul McCorry said.

‘‘In Wellington, the top end has increased around 23 per cent in the past 12 months compared to the bottom end which is 20 per cent.

‘‘But what’s really of interest is in the last month or even three months the increase is around 9.47 per cent at the upper end.’’

He put that down in part to Wellington’s economy recovering well in the wake of the Covid-19 pandemic.

‘‘I think people have anticipated a lot more job losses and a lot more concern after Covid and that didn’t really materialise in Wellington. I think people are actually feeling reasonably confident.’’

The fact that interest rates on mortgages were as low as 2.29 per cent, meaning ‘‘money is still effectively free from the bank’’, was likely also contributing to the trend, McCorry said.

He expected valuations in Kelburn and Mt Victoria to top $2m in two to three years.

Although valuations of properties in more ‘‘affordable’’ suburbs – such as Tawa, Johnsonville and Churton Park, in the city’s north – were not rising quite as quickly, there was more bad news for firsthome buyers.

With the cheapest quartile of properties nearing an average of $900,000, few homes in the capital could be accurately described as ‘‘entry-level’’, McCorry said.

Nicki Cruickshank, of Tommy’s Real Estate, said prices were continuing to climb right across the market.

While just a few years ago agents were lucky if they sold one or two $2m houses in Wellington each year, these days about 10 per cent of the 80 to 100 homes her team sold every month were in that range.

‘‘It’s purely because of lack of stock. There’s just nothing in the market, and it’s keeping prices up. They are Auckland prices. They’re almost Sydney prices for usually not the same quality.’’

In her opinion, the red-hot market was unlikely to cool any time soon. ‘‘It’s just mind-blowing how it’s kept going. Until we get more supply this isn’t going to change,’’ she said.

Seatoun resident Iain Macleod said he was pleased he and his wife bought their home in the suburb 17 years ago.

But, with no plans to sell, it was the good restaurants, shops and schools that he valued over potential capital gains. In fact, he didn’t even realise homes in the area were worth upwards of $2m.

He would not disclose how much the couple paid for their house, but said ‘‘I don’t think it’s gone up that much’’.