Wellington house prices are dropping, and that’s sending shivers through the Capital.
CoreLogic's head of research Nick Goodall says Wellington City has seen a sharp drop in property prices, but the trend – if indeed that’s what it is – brings the city into line with many other main centres across New Zealand.
“While we’re always cautious to read too much into a one month ‘trend’ the turnaround in Wellington City is quite sharp and given there’s supporting evidence of prolonged weakness at the upper tier of the market the softness is more likely to continue through winter,” says Goodall.
Goodall says residential values fell 1.3 per cent in May and the average residential property value now sits at $633,759.
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“Statistics tell a very different story to the anecdotal reports of strong market performance, which just goes to show: when it comes to real estate, there’s no arguing with the data, however much you don’t want to believe it,” says Goodall.
It’s the drop in Wellington City itself that’s letting the team down as the 1.3 per cent drop is almost entirely due to weak city performance.
Suburban real estate performance further out has offset broader declines. Upper Hutt for example is enjoying a mini boom, up 2.9 per cent over the last three months. Second place goes to Lower Hutt at 1.4 per cent, ahead of Porirua at 0.9 per cent.
When you delve further into the types of properties being impacted in Wellington’s sharp downturn, it’s those at the upper tier of the market (over $850,000) that are being hardest hit.
Annual growth in this value range has been limited to just 0.7 per cent over the last 12 months. Compare that to the mid-range market ($650,000 - $850,000) which presented a much stronger 7.1 per cent value growth over the same period. Even properties at the lower end of the market (below $650,000) have performed better than the top tier – albeit with relatively restrained annual growth of 2.5 per cent.
