Wellington homes now even further out of reach for first-home buyers

Wellington house prices continue to climb as other parts of the country cool, pushing the cost of the average capital home up by $48,550 in the past year.

The average asking price of a home in Wellington is now $528,200 – 10 per cent higher than it was a year ago.

The figures, from the Trade Me property price index, also show a 5 per cent increase in demand, accompanied by an 8 per cent decrease in properties hitting the region’s market during the busy spring period.

The combination is putting home ownership further out of the reach of many first-home buyers, and contrasts with a slowdown in price increases nationally, led by the stalling Auckland market.

Trade Me property head Nigel Jeffries believed the current Wellington increases were not sustainable, and would probably drop to about 5 per cent over the next year.

Wellington first-home buyer Andy Stantiall said he and his partner had spent a frustrating 18 months searching for a home before finally buying a semi-detached in Crofton Downs two months ago.

It had been frustrating to watch prices move further and further beyond what he could afford, he said. “I have a few friends who have been waiting to see if it plateaus, so this news is not great for them.

“Open homes have been few and far between. There hasn’t been much on the market in our price range. We were wanting to keep under $500,000.

We considered building, but there’s a lack of available land in Wellington.”

The 29-year-old said he had seen several friends move to Wairarapa rather than compete in the capital’s market.

Jeffries said the continuing rise in Wellington prices was partly because homes were still affordable in comparison with the average wage, which was not the case in Auckland.

The average wage in Wellington was $69,876 compared with Auckland’s $72,338, while average house prices were $365,000 higher in Auckland.

“The Wellington property market has stood strong over the last five years, climbing over 31 per cent and earning homeowners a hefty $127,000 since September 2012,” he said.

Nationwide, the average asking price for a home was up 1.1 per cent to $607,400 in the past year.

In other big centres, Christchurch was down 1.1 per cent on last year, while Auckland was up 2.5 per cent.

“Sellers in the super-city have taken their foot off the gas, with the number of new listings down 20 per cent on last year, leaving buyers with slim pickings compared to the glut of properties available over recent times,” Jefferies said.

“We are seeing unusually low stock for this time of year. We think homeowners are to some extent waiting for an election outcome before they put their property on the market.”

He expected listings to pick up once a government had been formed, but there might be a sting in the tail for Wellington if a Labour government cames to power. Jeffries believed that could lead to an increase in the size of government, adding more demand to the local mix.

Wellington City Council housing portfolio leader Brian Dawson said Wellington was a victim of its own success, with a strong economy attracting new residents.

The council is currently putting together its Long-Term Plan, which is likely to include recommendations from the mayor’s housing taskforce, such as working with developers to convert inner-city buildings to apartments; increasing the city’s social housing stock; and making consenting processes easier.

WELLINGTON REGIONAL PRICE RISES OVER THE PAST YEAR:

* Carterton: up 3 per cent to $392,500

* Kapiti Coast: up 20 per cent to $517,900

* Lower Hutt: up 19 per cent to $506,500

* Masterton: up 23 per cent to $341,200

* Porirua: up 23 per cent to $549,300

* South Wairarapa: up 2 per cent to $422,650

* Upper Hutt: up 16 per cent to $455,600

* Wellington city: up 7 per cent to $645,800

 

Retrieved from Stuff.co.nz

GED CANN AND TOM HUNT October 2017

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