The Wellington property market is struggling to keep up with demand thanks to an over-representation of house-hunters and an under-supply of housing stock, indicating a possible market resurgence ahead of the rest of the country.
Tommy’s Real Estate Wellington CEO Ben Castle says this imbalance makes it the ideal time to sell.
“In August, 67 properties went through Tommy’s books, with 131 offers,” Castle says. “Multi-offers are the norm right now because so many people are trying to get into the market but there’s just not enough stock available.
“Currently it’s a seller’s market in Wellington due to low stock levels. The demand is there, but not the stock, resulting in sellers receiving multiple offers.”
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August was the fifth month in a row that Tommy’s beat their previous year’s sales. Despite the nationwide post-Covid property market slump, Castle says the Wellington market is picking up.
“The Wellington property market fell the fastest and possibly the furthest across the country, but we’ve rebounded pretty well. A lot of people think now is a good time to buy, and some of the analytics we work with suggest that too.”
Property analysts CoreLogic’s August House Price Index showed Wellington prices crept up by 0.3 per cent in July compared to June. While that’s a small increase, it’s the first time since March 2022 that Wellington prices have increased from one month to the next.
In the sub-markets, Upper Hutt rose by 0.2%, Wellington City by 0.4% and Porirua by 0.6%. Kapiti Coast and Lower Hutt remained flat.
“Prices have softened significantly which means good quality homes are available at more achievable price points,” says Castle. “Borrowing isn’t necessarily easy at the moment, but what buyers can borrow will buy them so much more than what they would have got a year ago.”
Castle says the market continues to transact regardless of overall economics.
“People move around or relocate for work, families grow or get smaller as kids fly the coop – everyone has a different age and stage, and that’s always reflected in the property market. Buyers and vendors just need to work out the right time to buy and sell.”
There’s increased certainty around interest rates too, with the Reserve Bank’s recent announcement that the Official Cash Rate (OCR) would remain at 5.5%.
“While some of the major banks have increased their interest rates slightly, the general feeling is this is likely to be the end of interest rate increases,” says Castle.
Tommy’s Group CEO Ben Castle and Tommy’s Real Estate SalesDirector Tim Clark, REINZ Award.
“People want certainty. When they know how much their mortgage repayments are going to be and have faith their interest rates aren’t going to change too much, that gives them the confidence they need to get their ducks in a row, lock down their deposits, know what their repayments are likely to be, and get in the market.”
October’s election might impact the market but Castle says regardless of the result, a degree of certainty will come with it.
“A general election is an interesting dynamic for real estate, but whatever happens there are pockets of reassurance, and that confidence will always generate interest. The month before an election is always slow so we expect between now and October 14th a lot of people will be sitting on their hands, waiting and seeing. But right after the election – whatever the result – we predict there’ll be an increased sense of urgency from both vendors and buyers.”
For Wellington in particular, the election can play a significant role on the property market.
“The election is prominent in both our local mediascape and our local employment,” says Castle. “That means it really doesn’t matter what the outcome of the election is in this region. There are always going to be people in and around Wellington who need homes because they work for government, and that will be reflected in the market.”
Tommy’s Real Estate Wellington understands the Wellington market better than many: the Capital-based real estate company turns 25 next year.
“We’re proud that we’re Wellington-based from the city to Porirua, to the Kapiti Coast and into the Hutt,” says Castle. “The vision of Tommy’s 25 years ago was to become a part of Wellington’s and Wellingtonians’ lives, and a quarter of a century on that’s exactly what we’ve done.”
In 2022 Tommy’s won big at the national REINZ Awards, taking out the Largest Residential Office of the Year and the Highest Volume of Sales, making it Wellington’s most awarded real estate agency. This year, Tommy’s was a finalist in the same categories, plus the team won the Multi-Media Marketing Award.
Castle says the secret to Tommy’s success resolves around the people they’re here to serve, which is reflected in their approach to the community.
“Yes, there’s a transaction involved with real estate, but more than anything else it’s about the people who live here. Wellington is a dynamic, diverse city. Right across the region there are thousands of groups that can’t do what they do without funding. Tommy’s proudly partners with organisations like Wellington Free Ambulance and Life Education Trust because without these organisations, our communities would suffer.”
“It’s important that we give back to the city. Education, wellbeing, and health are integral to the future of Wellington and Wellingtonians, and Tommy’s is proud to play our part to support these and other organisations.”
To see Tommy’s community work or to find your dream home visit tommys.co.nz.
