- Australian property coach Tom Panos has called Wellington’s struggling market a warning for Australian policymakers.
- Capital values have fallen 32%, with retail vacancies above 10% and office vacancies above 12%.
- He urged Australia to study Wellington’s experience, amid concerns about housing policy and economic confidence.
A high-profile Australian real estate agent and coach says Wellington’s falling property market is a stark warning to homeowners and politicians across the ditch.
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Tom Panos posted on social media a video of himself on the streets of Wellington highlighting the capital’s “dire” situation, saying Australia needed to learn from it.
“Property values have been smashed from their peak, businesses are dealing with a tougher CBD, and confidence has taken a beating,” Panos said as he walked through a deserted car park in Wellington CBD.
“High interest rates, changing property policies and an economy heavily exposed to Government employment have all played their part. Walk these streets and you realise something: bad economic decisions eventually become visible. Australia, pay attention.”
Tom Panos on the streets of Wellington CBD. Photo / Facebook
Wellington property values have dropped by 2.4% in the last three months. Prices are 27% below their peak. Photo / Getty Images
Panos, who shot to fame as the auctioneer on The Block Australia, highlighted that Wellington property values were 30% below the peak, CBD retail vacancy was over 10% and office vacancies were over 12%. This was the highest in years, he said.
“You can see it on the streets ... this is what happens when confidence disappears.”
He blamed the previous Labour Government led by Jacinda Ardern for creating a “Covid boom” and the current Coalition Government led by Christopher Luxon for cutting thousands of public sector jobs.
“This is what happens when confidence disappears. I wish the political party of Australia came and did a three-day excursion here, right? Business has stopped expanding, property buyers have stopped competing, and sellers suddenly discover the wealth effect – that they are significantly poorer, and it acts out in their mindset as well. And Australia, this is a warning.
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“Don’t look across the Tasman and think that this could never happen to us. Governments have to understand that property policy, tax, regulation, employment, business confidence don’t operate in separate little boxes.”
He urged the Australian Government to visit New Zealand’s capital and learn from its mistakes.
“So, I’m walking around Wellington, I’m not celebrating what’s here. I’m looking at it and saying, Australia, study this place carefully because sometimes, man, the best way to understand what not to do is to look at somewhere that’s already lived through it. Guys, Australia ALP, come to Wellington and see what we’re heading for.”
Sydney’s median house price has fallen by A$69,000 since the beginning of the year. Photo / Getty Images
Speaking to OneRoof today, Panos said he "adored Wellington", but that it "should be doing much better".
"It's a walking city, everything is close by. It's a beautiful city, aesthetically," he said.
"The one thing that's disappointed me is seeing the high vacancy rates of shops and office space."
"Wellington should be a lot better than what it is. I really look forward to seeing it being a hustling, bustling city with a lower vacancy rate and confidence back there, and I'm sure that will happen in the years to come."
Wellington property values are under pressure. The latest OneRoof house price figures show the region’s average property value fell by 2.4% in the last three months, to $823,000.
Homeowners who bought at Wellington’s market peak have also seen the value of their biggest asset shrink by more than $300,000.
Property values in the capital itself have shrunk by 32% ($428,000) over the same period, leaving many in negative equity and trapped.
Property values in Australia have also come under pressure, with many in the real estate industry blaming the Australian Government’s decision to end negative gearing for investors and to introduce a new inflation-adjusted capital gains tax.
Australia’s heated housing market, where investors have accounted for 40% of new home loans, has rapidly cooled, with auction clearance rates plummeting and median sale prices in the country’s state capital cities, including Sydney and Melbourne, recording sharp declines.
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