Wellington’s real estate market is waking up, agents report.
Last year was long and flat for the capital city but Tim Clark, sales director for Tommy’s, said last week came as a surprise because all of a sudden there were signs of life similar to three or four years ago.
“We listed 40 [properties] out of our office last week and this week will probably be at least that.”
One of this week’s listings is an iconic lighthouse most Wellingtonians will be aware of when they drive The Esplanade.
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The one-bedroom structure is priced at enquiries over $940,000. It was built in the 1990s and is currently run as a bed-and-breakfast but the marketing said it could be a unique seaside residence.
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Another property for enquiries over $995,000 is a three-bedroom home in Owhiro Bay, to the south of the city.
This house is billed as having an outstanding view from almost every room – “sit and relax at the end of the day as the sun slowly goes down and lights up the Kaikouras in the distance.”
Clark said the listings were good examples of the diversity on offer. The market is looking buoyant with plenty of buyer activity.
The view from the Island Bay lighthouse. The property is currently run as a B&B. Photo / Supplied
He said late last year a property on Wright Street, Mt Cook, sold for more than $2 million, “which is quite big money for Wellington”.
Moreover, the property, which he describes as a bit like a Ponsonby villa, received 18 offers with 10 of those unconditional.
“That was pretty massive. That was like the old days. That shows you there are people out there.”
Last year, the average was more like one or two offers, he said. Clark puts the moving market down to more stability than last year.
“People have certainty around what’s going on. The government is formed, interest rates have probably peaked or plateaued, prices have sort of set themselves, they are not going to drop any further, not in Wellington anyway, and we’ll probably start trending upward a little bit from here.”
The three-bedroom standout home at 12 Owhiro Bay Parade, in Owhiro Bay, is looking for offers over $995,000. Photo / Supplied
People are ready to get on with their lives, and banks are lending money.
“I think another interesting thing is that if the bank is willing to lend you money now for the first time in a very long time the likelihood of servicing your mortgage in the future is likely to become easier rather than harder.”
With interest rates likely to trend down sooner than anticipated, the next couple of months makes for ideal buying conditions, he said, and there is more on offer. He said one Tommy’s agent had 27 new listings coming up in the next few weeks which is peak-of-the-market type of numbers.
Grant Henderson, regional general manager for Bayleys, also has high expectations for the year ahead.
“We run our View portfolio magazine, which is Wellington, Wairarapa, Whanganui, Manawatu and Marlborough, and we fill it up with between 55 and 75 properties and we’re well on the way to having that done across all of the franchises.”
A Ponsonby-style villa on Wright Street, in Mount Cook, sold recently for more than $2m. Photo / Supplied
One type of property he is noticing coming to market is multi-unit rental properties – not just one or two flats, but six or more.
These are properties which have been held by landlords for many years but who have decided to exit the market.
“We’ve got a couple of large blocks coming to market, 10 bedrooms sort of units, and things like that.”
Owners are saying even with the change of government it has become too tough with the high interest rates and not enough yield.
Some will get a good profit, depending on when they bought. A property bought for $250,000 twenty years ago which sells for $1.8m is a pretty good amount.
“They might be thinking ‘I’ve had this for 15 or 20 years, I’ve done my time as a landlord’.
“But there are also people looking at it going ‘we’re topping the mortgage up and this is no fun anymore’. If you bought anything in 2019/2020 you possibly are in a world of pain.”
A four-bedroom trophy home on McFarlane Street, in Mount Victoria, sold under the hammer in December for around $2.7m. Photo / Supplied
Last year was a hard year overall, but Henderson said Wellingtonians were out buying again, especially first-home buyers and migrants who have moved to work in the capital city in industries such as IT.
“We’ve had a lot of people from India that have come to New Zealand and are highly skilled and they are definitely buying.”
Henderson is also noticing people climbing the property ladder, saying because prices have not taken off a $2m house might sell for $1.5m.
A lot of properties are transacting in the $1.5m to $2.5m range. He said before Christmas, Bayleys sold under the hammer a four-bedroom property in McFarlane Street in sought-after Mount Victoria for around $2.7m.
Henderson said people were looking for four-bedroom homes with no work to be done so that they can move straight in.
He was delighted to see buyers back, but said that did not mean prices were going up but rather the housing market cycle was working through.
“It’s going to be a hard year but there are buyers out there looking. The general rule of thumb is we’re in a growth phase for seven to 10 years, then recession or depression time.
“It takes three years for it to get back up on the cycle again so if we assume ‘20/21 was the peak, we’re falling off the peak ‘22/23, the end of 2024 by rights we should see a slight shift in the interest rate cycle and then in 2025 things start again.”
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