Wellington Market Update | May 2024
Tim Clark of Tommy’s Real Estate forecasts that Wellington’s resilient property market will remain stable over the next year, even in the face of a challenging economy.
“Across the Wellington market, we’re observing that prices have stabilised, activity levels are up, and there’s a plentiful supply of properties for buyers to choose from,” he notes.
“Buyer sentiment is improving, and properties priced appropriately are selling swiftly, indicating a well-balanced market. Wellington’s resilience is evident as the market adapts and navigates through recent economic changes.”
Assuming no significant economic shocks, Clark believes that this stable environment will likely continue over the next six to twelve months.
“With steady interest rates and balanced supply levels, the Wellington residential market should maintain its current momentum. However, we remain vigilant to changes in economic conditions, particularly in employment trends and government policy.”
Clark highlights several key factors driving the market, ranging from stable interest rates to supply-and-demand dynamics.
“With the recent stabilisation in interest rates, buyers have more certainty about their borrowing costs, leading to renewed confidence in making property purchases. At the same time, increased stock levels have given buyers more options, leading to balanced negotiations between buyers and sellers. Despite challenges in the public sector, Wellington’s diverse economy remains relatively strong. The tech and creative sectors continue to flourish, attracting talent to the region.”
He continues, “On top of this, stabilising prices and increased activity levels have improved market sentiment, which is driving more transactions.”
Clark acknowledges that recent negative headlines have made some buyers cautious. However, he adds, “We haven’t seen a substantial decline in overall buyer confidence. The Wellington market remains attractive due to its strong community, vibrant culture, and solid employment opportunities in the private sector. Many buyers recognise the long-term value of investing in Wellington real estate, especially as prices have stabilised.”
The region’s diversified economy, with significant contributions from tech, creative industries, and education, helps to cushion the impact of public sector layoffs. “The underlying fundamentals of Wellington’s property market remain strong, such as a desirable lifestyle, quality education institutions, and vibrant community culture. Investors continue to see Wellington as a stable and attractive market for long-term investment due to its demand for rentals and future capital growth prospects.”
Clark adds that continued population growth and migration to Wellington contribute to sustaining demand.
Demand is strongest in suburbs like Thorndon, Karori, and Brooklyn due to their proximity to
the city; coastal lifestyle areas like Eastbourne, Seatoun, and Island Bay; and growth suburbs like Tawa and Johnsonville due to their affordability and accessibility.
“The key buyers are those looking for their first home with the help of government assistance programmes and favourable lending conditions, young families seeking good schools and family-friendly neighbourhoods, and investors due to the high demand for quality rentals in the region,” he concludes.
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