House price growth in Wellington has slowed dramatically in the past six months, and it's likely the capital will be the first major Kiwi city to suffer a market slump.
Figures from OneRoof's data partner Valocity shows house price growth in Wellington fell from almost 7% at the end of June to just under 4% by the end of December.
By contrast, Auckland's average property value rose two percentage points over the same period, while Christchurch's climbed one point, from 7% to 8%.
Although Wellington's average property value jumped 23% ($240,000) in the last 12 months to $1.286 million, much of that growth was in the first half of the year.
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House prices have even dropped in one of the city's suburbs: Mount Cook's average property value slid 0.9% ($9000) in the last three months. House prices in a further five suburbs, including Oriental Bay, the city's most expensive property location, barely grew at all over the same period.
Only Seatoun, Brooklyn, Strathmore Park and Kelburn saw house price growth in line with the national quarterly growth rate of just over 6%.
Former BNZ chief economist Tony Alexander predicts house prices in the capital will dip this year.
He said that Wellington’s soaring growth figures have been “out of whack” with the rest of the country, but prices had already passed their peak.
“By November, according to real estate agents, FOMO had almost gone in Wellington, and it is now a buyers' market – that's ahead of the rest of the country which was still saying it’s a sellers' market," he said.
Economist Tony Alexander says Wellington house price growth is out of whack with the rest of the country. Photo / Fiona Goodall
“In fact, Real Estate Institute of New Zealand figures show the city's median house price dipped by 1.5% in November, the first nationally. Prices for the quarter were up only 2.3% compared to 6.6% for the rest of the country.”
Alexander said that the capital’s prices were flat from 2008 to 2015 and undervalued, so had just been through a huge catch-up. “Now it’s due a correction in 2022. I expect it to be the first region to actually decline in prices,” he said, adding that prices in Christchurch, still in catch-up mode, might still rise while Auckland’s will flatten.
