By Kelvin Davidson, Chief Property Economist, CoreLogic New Zealand
Wellington’s property market has been on a prolonged upswing since 2015 and if anything that boom has intensified over the past nine to 12 months (post-COVID). What’s been going on lately and does it tell us anything about future prospects?
Starting with average values themselves, in June 2015 the figure for wider Wellington (defined here as city, Porirua, Lower Hutt, Upper Hutt) was $459,751. Now, only six years later, the number has jumped to $1,024,649 – a rise of 123%, or $564,898.
As the chart shows, each of those sub-markets has risen strongly over the full six years since 2015, but even more so in the past 12 months. Even the ‘cheapest’ market in Upper Hutt now has an average property value of more than $850,000.
’There are basically no mortgagee sales anywhere.’’ In 2020, 112 mortgagee sales were recorded in New Zealand, in a year that featured Covid-19 and the resulting nationwide lockdown.
STUFF This year was tracking even lower, with 10 recorded to date, Davidson said. Figures from CoreLogic since 2005 show mortgagee sales peaked in 2009 – largely driven by the global financial crisis – with 2620 mortgagee sales recorded. In the wider Dunedin area, four mortgagee sales were recorded in 2019 and none since then, Davidson said. The reason for the decline was low mortgage rates coupled with low unemployment rates. Those factors made it easier for people to service their mortgage, he said.
It is in nobody s interest : Just 10 mortgagee sales nationwide in 2021 stuff.co.nz - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from stuff.co.nz Daily Mail and Mail on Sunday newspapers.
More townhouse-style developments were being developed, which did not have the same lift and sprinkler system requirements of bigger buildings. “One of the drivers of this is increased collaboration between private developers and the [Government’s] KiwiBuild unit. Underwrite of units that meet the KiwiBuild price caps has enabled developers to proceed with construction in tandem with sell-down rather than waiting for the presale threshold to be met, which helps projects with price-capped units reach completion faster.” Buyers had responded, resulting in off-the-plan sales tripling since the end of 2018. “The two most recent quarters had more presales than all four quarters in 2019 combined. As presale volumes tend to follow general housing market activity and price growth, this is a more positive environment for developers,” Carleton said.
The homes that are $240k cheaper now than in 2017 stuff.co.nz - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from stuff.co.nz Daily Mail and Mail on Sunday newspapers.