PROPERTY MARKET PURCHASE UPDATE (December 2017)
The number of properties sold in November across New Zealand increased 17.8% from the previous month – the largest October to November increase seen in 6 years according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.
All regions, except the West Coast, saw sales volume increase in comparison to October. Bindi Norwell, Chief Executive at REINZ says: “There was a 17.8% increase in the properties sold in New Zealand from October to November – this is the largest October to November increase we’ve seen in six years. After taking into account seasonal adjustment, that increase is 4.5%. While there was a significant increase in properties sold, November traditionally sees a robust increase, although the change in November compared to last month was stronger than we would have expected based on past data. “After a difficult winter and a slow start to spring, the real estate industry has experienced a lift in optimism and activity, with increases in the properties sold in 15 out of 16 regions across the country when compared to the previous month,” continues Norwell.
Median prices across New Zealand rose 1.9% in November to $540,000 – up from $530,000 in October 2017 and median prices for New Zealand excluding Auckland rose 2.3% in November to a record $450,000 (up from $440,000 in October) – year-on-year saw a price increase of 3.8% and 8.4% respectively.
“The Wellington region experienced another record median price in November. Buyers are still waiting until more is known about the new government policy around investment and the banks are still being cautious with lending beyond LVR requirements. Over the next few months we believe there will be further improvement in volumes and increased stock over the summer months, leading to prices stabilising more.
Compared to November 2016, sales volumes rose 6% across the region with sales rising by 26% in Upper Hutt City, 24% in Carterton District and 19% in Masterton District. Compared to October, sales volumes increased 18%, with sales increasing by over 20% in all TA’s except Masterton (+17% and Wellington City (-2%). On a seasonally adjusted basis, sales decreased 1% from October, indicating that the increase in the sales count was slightly smaller than expected when moving from October to November.
Source: REINZ Monthly Property Report (Nov 2017) – click here
WELLINGTON PROPERTY MARKET RENTAL UPDATE
Inner city apartments are a popular choice for students, young professionals and couples downsizing out of family homes. Wellington City has around 7,200 apartments ranging from studios through to 4 bedrooms, with the bulk being 1 or 2 bedrooms.
Demand for medium sized 3 to 4 bedroom homes is moderate.
Houses and flats close to Victoria University in Kelburn, Massey University in Mt Cook and the Wellington Polytechnic (WelTec) campus in the city rent quickly. Many are not of high quality and rentals are pitched to this market.
Properties in city suburbs that get sun in winter, have regular transport services and have access to a range of retail services are in high demand. Rentals tend to decrease as you move out of the inner city suburbs; although a good range of quality family homes are available in Tawa with good rail connections and a 15 minute train ride to the city. If a property is priced at the lower end of the market they are usually made of lower standard building materials (could be cold in winter) or are not ideally situated for sun, transport, and shops or have winding paths or lots of steps as access.
Tenants under pressure amidst record-breaking rents
Renters across the country will be feeling the pinch after the national median rent increased for the first time since December, up 3.4 per cent on last year to a record-breaking $460 per week, according to the latest Trade Me Property Rental Index. Head of Trade Me Property Nigel Jeffries said this increase has been driven by a lack of available rentals.
“Supply simply cannot keep up with the demand we are seeing and it’s rare for rental properties to be coming on and off the market so quickly. “In November, total rentals were only down 15 per cent on last year, but available rentals were down a staggering 49 per cent. We’re seeing rentals are being listed for a very short time as fierce demand means landlords can have their houses listed and then tenanted in record time. While we did see rent rises around this time last year, the market is much tighter this year and the coming months are not looking good for flat-hunting Kiwis.”
“Wellington renters are under the most pressure as we head into the New Year with the median weekly rent up 8.7 per cent on last November to $470 per week,” Mr Jeffries said.
“We are seeing a growing number of enquiries on Wellington rental listings within just hours of appearing onsite as Wellingtonians’ battle to secure a flat. In November, a two bedroom property in Mt Cook received 33 enquiries in the first 3 hours of being listed.”
Source: Trademe Property (Dec 2017) – click here
ECONOMIC SNAPSHOT OF THE WELLINGTON REGION
Wellington City’s economy continues to experience more moderate growth. Infometrics’ provisional estimate for GDP showed growth of 1.8% in the September 2017 year. This was the softest figure in almost two years and was also below the national average of 2.5%. These growth trends need to be interpreted with care, however, given that the November 2016 earthquake and associated distortions is still included.
Indeed, underlying measures of spending and investment in Wellington are generally healthy. The unemployment rate of 4.6% is below the national average (4.9%). Car and commercial vehicle registrations grew steadily in the September 2017 year, while traffic flows around the city expanded by 2.6% (slightly above the national average). Marketview electronic card transactions data shows that retail trade in the capital has grown by 2.3% over the past year. Tourism expenditure grew by a similar amount. The slight dip in guest nights in commercial accommodation in the city was more than offset by sharp growth in the number of Airbnb stays over the past year.
Wellington’s housing market is cooling, in line with the national trend. The number of sales was down by 22% in the September year, while house price growth has halved from 17% six months ago to 8.7% now. Even so, demand for new housing is strong, with residential consents rising by close to 21% over the past year. Land has been made available in areas like Churton Park, Woodridge and Crofton Downs.
The extra land supply and houses are necessary to accommodate new people. The city’s population expanded by 4,800 in the June 2017 year, or 2.3%. This ranked Wellington 14th out of 67 territorial authorities. Net international migration was 2,917 in the September year.
There is a clear need for further earthquake rebuilding, given that there is effectively no available prime office space in the CBD. Consistent with that need, the value of non-residential consents in Wellington has risen by almost 22% over the past year. We anticipate the real value of building work put in place in the capital to rise from about $450m this calendar year to $550m in 2019.
Source: Infometrics (11/01/2018) – click here
WELLINGTON IS A GREAT PLACE TO LIVE
Wellington City has been voted the “coolest little capital in the world” by traveller bible Lonely Planet. It’s keenly promoted as the cultural heart of the nation, a mecca for the arts and creative sector, the seat of Government and the centre of New Zealand. Here’s some reasons why:
- Wellington is creative. It is the region of choice for imaginative people. If you are stimulated by fresh ideas and new emerging outlooks you’ll find this place totally inspiring.
- Wellington is beautiful. Everywhere you go, the sounds and smell of the ocean hang in the air, and there are green hills and valleys. You can kayak in the harbour, walk in the bush and swim in the ocean. In Wellington the air is clean and you can see the stars at night. Wellington has stunning natural beauty.
- Wellington is compact. We are confined by geography. Within the city, walking is often the preferred option. Everything is close. With excellent public transport getting around the city is easy.
- Wellington is cosmopolitan. People from all over the world choose to live in Wellington, making it a diverse and exciting place to be. Over 40 different countries have Embassies here.
- Wellington is smart. High quality education is at the heart of Wellington. It starts in our primary schools and flows all the way through to our world ranked universities. Thinking and achievement radiate from here out across the country and around the globe.
- Wellington is foodie. Every year Wellington restaurants and bars win national awards for being the best in the country. You can sample food from all around the world or experience the unique flavours of some of our finest restaurants. Wellington is also famous for coffee – with reportedly more cafes per capita than any other city in the world. We are the cuisine Capital.
- Wellington is vibrant. If you like festivals and street parties, you’ll like Wellington. There is always something on, and always something to celebrate. Some of our better known events include the International Arts Festival, International Rugby Sevens, Montana World of Wearable Art, International and Foreign Film Festivals, Dragon Boat Racing, Toast Martinborough and the annual Summer City Festival.
- Wellington is techno savvy. Wellingtonians can browse, tweet and Facebook to their hearts’ content with free Wi-Fi in the central city. The network is available in outdoor areas from Westpac Stadium at the north end of the city to the Embassy cinema in Courtenay Place. Wellington is the first city in Australasia to provide comprehensive free Wi-Fi in the CBD.
- Wellington is sporting. From cricket at the Basin Reserve where you can picnic on the terraces while watching national or international games to Westpac Stadium, home of the Hurricanes rugby team, venue for the International Rugby Sevens and where the Phoenix play in their Australasian soccer league games. Wellingtonians love their sport. They love hockey at the Mount Albert Stadium, badminton at Badminton Hall, swimming at the Freyberg Pool or at the Kilbirnie Aquatic Centre, wind surfing at Kio Bay or Plimmerton, basketball at the Newtown Stadium, or sailing, rock climbing, squash, triathlons, tennis, kayaking, fishing, paragliding, tramping and golf. There’s a myriad of sports Wellingtonians enjoy watching and participating in.
- Wellington is colourful. The vista of colour from painted wooden houses sitting on the hillsides facing the harbour is one of the striking memories for cruise ship passengers visiting Wellington. There’s also the colour of the annual Chinese New Year festival, the snow on the mountains to the north and east of the city in winter contrasting with the blue of the harbour and green hills. Great raw material for those keen on photography.
- Wellington property is affordable. Despite increased market activity, property prices are generally quite static throughout Wellington. Properties in the lower price brackets are meeting the greatest demand. Wellington has lots of city apartments for rental, with a wide variance in cost, quality, size and facilities. Most are 1 and 2 bedroom, with good quality 3+ bedroom apartments in short supply. Quality houses to rent are in short supply but with our assistance we have always been successful in settling people.
- Wellington is the Capital. It’s a fascinating place to be. You can sit in a cafe next to a Government minister, and pass some of the most respected names in arts, education and business on the street. You have all the advantages that come with living in a capital city .People from Wellington are well educated, politically aware and open.
- You can’t beat Wellington on a good day. It’s true; Wellington has a reputation for wind. The fresh energy it brings to the region is infectious. Wellington is also sunny, with an average of 2050 sunshine hours every year. Walking along the waterfront, swimming at Oriental Bay, watching the sunset from Mt Victoria – there is simply nowhere better to be than Wellington.