Wellington Market Update | November 2023
The Wellington housing market is expected to pick up momentum post-election as buyers and sellers adjust to new government policies aimed at stimulating activity.
“Since the election, we have seen a rise in listings and property appraisals, and there has been a modest increase in sales,” says Tim Clark, Sales Director at Tommy’s Real Estate.
“In the first week of November alone, Tommy’s sold 16 properties with 45 offers across these sales. This indicates that the market will continue to get busier, although buyers remain cautiously optimistic. They are waiting to see how the new government’s policies unfold before making significant decisions.”
Tim highlights that the new government may introduce policies affecting housing affordability, taxation, and lending rules. “Typically, there is an adjustment period as the market responds to new legislative directions, with the long-term effects becoming clearer over time.”
Regarding potential implications for the Wellington market if the new administration rationalises the civil service, Tim acknowledges the impact but suggests the market is somewhat insulated due to Wellington’s status as the capital city.
“Factors such as limited housing stock and sustained interest from immigrants are likely to mitigate any potential downturn in house values,” Tim explains. “Each election cycle brings new government projects that require additional staff, which helps offset potential job losses within the sector.”
Tommy’s expectations for a recovery in house values are cautiously optimistic but more conservative compared to some economists who predict rises of 10-15 per cent over the next few years.
“Predictions hinge on several variables including interest rate trends, economic growth, and housing supply dynamics,” Tim notes. “While a 10-15 per cent rise seems plausible under favourable conditions, it remains contingent on these factors.”
Property data analyst CoreLogic recently reported figures indicating “the end of the housing market downturn … Around the main centres, signs of the emerging upturn were pretty widespread in October …”
“Although a new government hasn’t been formalised just yet, the shift in voting to the centre-right seems to have bolstered housing market confidence, despite mortgage rates edging higher again recently. We’ve also seen net migration rise to a new record high, which is boosting property demand,” CoreLogic highlighted.
However, Tim and CoreLogic both acknowledge variability remains an issue in Wellington’s market.
“Conditions in Wellington are more nuanced compared to other centres,” Tim reflects. “While signs of recovery are evident, it’s premature to declare the downturn over. We’re seeing stabilisation in certain segments, yet the market remains sensitive to external pressures such as global economic trends and national policy changes.”
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