A waterfront home in Porirua sold this year for $2.1 million - double its 2019 RV - despite being asbestos-clad and sitting on a section that had recently suffered a land slip.
But the standout sale appears one of the few exceptions in Wellington's challenging housing market, with agents telling OneRoof that buyers are now fronting up with offers 15% below RV to the shock of some sellers.
The five-bedroom home on Paremata Road, in Whitby, Porirua, was sold in March as a development opportunity, and proved incredibly popular with buyers, even though the near-5000sqm section cannot be subdivided.
The listing agent, Ray White Wellington City agent Ben Atwill, said he had to employ three security staff to manage traffic and access at the first open home, with 105 people turning up for the 45-minute viewing.
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“It was the cliched 'location, location, location'. The buyer will bulldoze the house and build a passive home on the site. They've been looking for an opportunity to do that for some time,” he said.
The property, which last hit the market 20 years ago, is 20 minutes from Wellington CBD, but the location will allow the new owner to live an off-grid lifestyle in what feels like a private setting.
Another sale bucking the trend was that of an immaculately refurbished villa on Tiber Street, in Island Bay, Wellington. The four-bedroom home sold this month for $2.075m – just above its 2021 RV and almost $1m more than what sellers paid for it in 2019.
“We had nearly 100 people through the open homes, even though we are in a down market,” Atwill said.
The waterfront Whitby property was hugely popular during open homes, with the agents having to hire security. Photo / Supplied
Atwill said both sales were exceptions, with the shift in the Greater Wellington market leaving many vendors unhappy with the offers buyers are making.
The latest OneRoof-Valocity house price figures show the average property value in Greater Wellington has dropped 1.2% in the last 12 months to just over $1m. However, Atwill said that buyers were trying to secure bigger discounts.
“A lot of buyers turn up and say, ‘Hey, look, the RV is a million dollars, and we can see in this suburb properties are selling for 15% less. So here’s 850 .”
Atwill said the offers were a shock. “Every home is everyone's castle, right? So 15% below RV is a big adjustment for a seller . They ask: ‘Why are we 15% less? My mate next door who sold in December, got his RV.’”
Tommy’s Real Estate director Nicki Cruickshank said that buyers shouldn’t make offers based on a property’s RV, although some were. When the Wellington market first started to fall, some buyers were offering silly prices - sometimes hundreds of thousands of dollars less than a property was worth. “That just alienates sellers. If the buyer does come back with a reasonable price, the sellers won’t want to deal with them anyway,” she said.
A renovated villa on Tiber Street, in Island Bay, Wellington, sold this month for $2.075m. Photo / Wellington
Cruickshank said there were some bright spots. Her agents sold a garage on Sydney Street West, in Thorndon, Wellington, for $112,000. “The vendors were hoping for around $80,000.” She added, jokingly: Selling garages might be the way to go with the council in Wellington removing all the car parks on the street.”
Figures released by Real Estate Institute of New Zealand this week show Greater Wellington’s median sale price was down 5.9% year on year and its sales count down 19.7% year on year. The figures also showed that the median selling period for the region hit 61 days in July, the highest it’s been since February 2009.
The current Days to Sell for Wellington has increased to 61 days in July, compared to the 10-year average for July, which is 38 days. The sales count is down 19.7% year on year.
CoreLogic head of research Nick Goodall said first home buyers had pulled from the Wellington market after making a strong mark during the boom, which may be a factor in the sharp turnaround in prices. “A significant increase in development activity over the past two years, particularly in Lower Hutt and Upper Hutt, could also be a factor in recent weakness. Some buyers who stretched their budgets based on development potential may now find that potential may not be realised soon enough to make the sums work.”
It’s not just first home buyers who are missing from the market, said Cruickshank. Investors are nowhere to be seen either. “First home buyers and investors probably made up 40% of the market prior. That’s what’s missing out of the market.
“But there seems to be more people moving up and moving down than there was last year. They make up the numbers because people can now [buy] the house they want rather than what they have to have.”
Even so, for those buyers who are in the market, there is a feeling of general uncertainty, Atwill said: “For vendors it’s ‘are we going to get the prices we want to achieve?’. But buyers are thinking, ‘Do we go now? Is this the cheapest it’s going to get, or do we go in a year’s time? And are we even going to get pre-approval?’”
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