Uptick in housing market – but don’t get too excited
Wellington’s housing market might be seeing the first tiny green shoots of spring with a modest rise in house values.
However, it’s a rise of just 0.2% in the latest CoreLogic figures and bucks the trend of a weak property market with national values down by another 0.5% in August.
It was the sixth consecutive fall since February’s “mini-peak”. Those falls have sliced $31,100 off house values nationally since then.
CoreLogic’s Home Value Index (HVI) said in August, median value across all housing stock now sat at $811,583, which remained 17% above pre-Covid levels but also about 17% lower than the January 2022 peak.
“No doubt many households will be feeling happier now that the official cash rate is falling and mortgage rates are headed lower too. This sentiment effect, as well as the direct boost to borrowers’ finances, could support housing in the near-term,” said CoreLogic NZ chief property economist, Kelvin Davidson.
The Wellington area had flattened out a little in August, after some weaker results in the prior few months, he said.
“Kāpiti Coast recorded another drop in values – 0.9% – while Lower Hutt and Porirua also fell. But the Upper Hutt market held steady in August, and Wellington City recorded a modest 0.2% lift in values.” Lower Hutt’s fell 0.7% and Porirua 0.2%. Wellington’s median value is now $947,484, Kāpiti $813,336, Upper Hutt $763,940, Lower Hutt $763,940, and Porirua is on $736,429.
Davidson said the falls mean values remain lower than three months ago in each of those sub-markets, as well as their mini-peaks earlier in the year. “The negative sentiment that’s circulating around public sector employment at present will ... weigh on wider Wellington property values. But just like in Auckland, there are other factors at play too, such as the fact that even after recent falls, there probably aren’t many who would call Wellington’s market ‘cheap’, and affordability pressures could linger for some time.”
Davidson said the bargaining power lay with buyers in a market but only for the limited pool of buyers who could secure finance. “Even if people haven’t lost their jobs, the increased feelings of insecurity will still tend to flow through to less enthusiasm to trade property or pay top-dollar.”