Price has been the biggest change in the Wellington residential property market in the last 25 years but one real estate agency celebrating a quarter of a century in the market this year has navigated it all.
Tommy’s Real Estate celebrates 25 years in business this year and chief executive Ben Castle says although he has only been with the company for three years, Tommy’s has navigated up to four property cycles in that time.
Figures from the Real Estate Institute of New Zealand show the ebbs and flows of the Wellington market from January 1999 when the median house price was just $225,000, just 3% ($7500) below Auckland’s median sale price.
For much of the 2000s, price growth in Wellington matched and sometimes exceeded price growth in Auckland. However, by the time the housing market started to pick up speed, post the Global Financial Crisis, prices in Auckland were significantly ahead of those in Wellington, with the difference between the two approaching 50% at points in the cycle.
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The figures show however by January this year, the gap between the two had crunched to 15% and $130,000.
Board director Nicki Cruickshank has been with Tommy’s for 20 years, selling full-time for 14 of those.
She says the Auckland market tends to go through huge rises and then quite large troughs, whereas Wellington increases in plateaus.
“Auckland has a mountain graph ... We go up less and then we steady for five years, and then we go up again and steady for five years.”
Historically, Wellington’s property prices mirrored Auckland’s, but post-GFC, Auckland’s prices did surge ahead, says Cruickshank.
Castle says Covid has extended the current market cycle. He says the Auckland market is also driven by migration while traditionally Wellington had experienced more stability due to its public sector dominance, although that was being challenged in the current environment.
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“We are a public sector town. So that’s where it has been a lot softer because there’s that uncertainty. The public sector has taken a hit so, the buyer pool has also shrunk.
“However, if you’re a buyer, it might be a great time to buy. So, the market’s fantastic for you. It is taking a longer time for properties to sell so that can also help buyers.”
Cruickshank says the Wellington market is also constrained by geographical limits, leading to price fluctuations based on market conditions.
In a strong market, people tend to move further from the city centre due to higher prices while in a weaker market, people can afford to live closer to the centre.
Bill Mathieson was one of the first real estate agents employed by Tommy’s 25 years ago and is still with the company, which he says has retained many of its staff for long periods.
Tommy's has navigated the up and downs of the market since 1999. Photo / Getty Images
Despite the challenges, he says, there are still transactions occurring. In the last three months, Tommy’s held 38% of Wellington City sales.
“We are in testing times at the moment. There’s still houses being bought and sold, and we are still trucking along, it’s just harder to put the deals together.”
He says when the real estate market is surging anybody can sell houses.
“But now that things are a little bit tighter, people are looking for agents that have got experience, and that’s why people lean on companies with a positive track record.”
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