The continued shortage of quality real estate listings, coupled with record low mortgage interest rates have combined to add some zing to the property market over October.
Spring normally brings with it a surge in house listings, but listings are generally down throughout New Zealand. With lower interest rates enabling new buyers to enter the market, competition for limited stock has contributed to the October results.
Values across the Wellington Region rose 6.4% in the year to October and increased 2.4% over the past quarter. The average value is now $730,019. Over the last three months, the region’s modest growth saw Lower Hutt record the highest rate of quarterly growth at 5.4%.
QV General Manager David Nagel said “The residential markets of all our main cities have shown value growth over the past three months, with this largely attributed to the recent reduction in interest rates by the major banks.”
“Even the markets which have struggled over the past few months, such as Auckland and Christchurch, are showing a resurgence in prices achieved,” he says.
“The key property market drivers have remained strong over the past few years with low interest rates, a positive economic sentiment as well as net migration continuing to fuel housing demand. Countering these positive drivers are affordability challenges, where the price of housing in a number of locations has increased to a level many New Zealanders simply cannot afford,” says Mr Nagel.
Upper Hutt has seen the strongest annual growth at 15.2%, followed by Lower Hutt at 9.8%, Porirua at 8.5% and then Wellington City trailing on 3.6%.
QV Senior Consultant David Cornford says there is a shortage of property on the market in the Wellington region. “The tight supply combined with the relatively strong local economy, and record low interest rates is resulting in continued upwards pressure on prices.”
Well-presented properties in desirable locations are attracting strong levels of interest and are selling well.
First home buyers remain active and investors have showed renewed interest over the last few months, a result of lower interest rates and the possibility of higher returns due to the strong rental market in Wellington.