The Wellington suburbs that have taken the biggest tumble with values dropping by almost a quarter since the peak now have some “bargains” and agents say those who don’t act will likely regret it in years to come.
The average property value in Lower Hutt has slid 22.3% to $776,000 and 23% to $765,000 in Upper Hutt, and along with the 24.8% drop in Wellington City to $993,000, have suffered the biggest falls in the region, according to OneRoof-Valocity data.
Professionals Red Coats Lower Hutt managing director John Ross said the gap between what people can pay for an existing home compared with a new home has blown out considerably and is one of the reasons the number of new-builds for sale in the Hutt Valley is at an all-time high.
“The gap between what you pay for an existing [compared] to a new home is larger than it has probably been for 40 years so your apparent value for money looks significantly better than for an existing home.” The older homes were typically single-glazed, had limited insulation and would no doubt require maintenance, but the upside was they were usually on a full site with off-street parking, often single-level and significantly cheaper.
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“Some of those existing homes are so cheap they really have to be bargains. I don’t think you would call them anything else than bargains.”
A tidy three-bedroom family home on Tilbury Street in Fairfield and two two-bedroom flats in a tidy condition on Acacia Avenue both recently sold for $725,000
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Ross said both properties represented exceptional buying and signaled what he believed was the market at or near the bottom.
Among those buyers acting now were migrants who had residency and had been working hard to save up a deposit, he said.
“There are going to be some people who will be rubbing their hands and saying ‘wow we really did get our timing right when we bought’ and there will be other people who will look back on this time – if they are investors – and say ‘why didn’t I buy more at that time I didn’t realise how good it was’.”
Bayleys Wellington general manager Grant Henderson said Lower and Upper Hutt had seen some “heavy” drops and people were now looking at buying in areas that they couldn’t afford at the peak of the market.
“What some people are doing now is saying ‘what we used to pay in Wainui, we can now buy in Lower Hutt so we will go to Lower Hutt Central’. And, of course, Upper Hutt is the slightly poorer cousin, but you are just getting such good value in those locations. They are just so popular at the moment and rents are still good.”
At the peak of the market, developers were paying premium prices for house and sections so a property that would have normally sold for $700,000 was fetching $1m, but now the developers have disappeared so have those high prices, he said.
“The magic number in Hutt Valley is $700,000 to $800,000 – if you’ve got anything in that range there are buyers for it.”
That price range would buy someone a 1950s to 1960s on a 600sqm section in either Lower Hutt or Upper Hutt. However, two properties had recently sold in Upper Hutt for even less with one selling for $580,000 and another for $650,000.
Within the last month there had been a noticeable increase in the number of people looking for houses.
Ray White Leaders Upper Hutt sales manager Leanne Senior had been involved in about five multi-offer situations including one property that had eight offers presented and another with 11, which was something she hadn’t seen for about 18 months. Most of these properties were usually the next price bracket up from the first home and between $750,000 and $900,000.
“The buyers in the marketplace are pretty educated now so if they see something they love, they put in an offer. Whereas even going back three months they were all sitting back.”
However, Senior said the properties that were selling were the ones where the vendors were realistic and did not expect to get the same price they would have in 2021 or 2022.
“Activity is increasing and if the vendors are realistic, they will sell, but they’ve got to listen to their agent, listen to the feedback, know what’s happening in the market. We have basically dropped 20% in Upper Hutt and that’s the reality from last December.”
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