Wellington Market Update | Presented by Tommy's

The tight housing supply in Wellington will continue because stock was depleted during lockdown, although more home-owners are looking to sell.

“We have noticed a strong increase in the amount of owners wanting to come to the market, which is good as the stock levels are so low,” Tommy’s Real Estate Sales Director Nicki Cruickshank says.

“The difference between level-four lockdown this year and last is we still managed to get most of the properties sold that were on the market and had mostly been viewed prior to going into lockdown.

“People were much more relaxed this year, and happy to offer during this period. However, we could not list new properties, so we ran the stock right down, and that probably benefitted the few that were listed.”

Before the country went into Level 4 lockdown, the Wellington property market was steady, Nicki says.

“A little bit of nervousness was creeping in around the proposed increase in interest rates. So one good side effect of lockdown is that this now may be delayed for some time hopefully.”

But buyers will face other challenges, especially those looking for their first home.

“Proposed changes to increasing the loan-to-value ratio and the amount of deposit they will need will make it harder for first-time buyers,” Nicki says.

“But the biggest issue I can see going forward is trying to buy ‘new’ homes. With the ever-increasing and rapid rises in the prices of building materials, banks are not always prepared to lend to someone who is buying a land-and-build package because of the potential ‘blow out’ in costs. In the long run, this will have an impact on supply.”

So for these reasons, she expects the Wellington the market to continue to stabilise.

“There will be some ‘pent up’ demand following the move to level two. We are noticing that already, but nothing like the levels of last time.”

Nicki says the biggest challenges agents, vendors and buyers faced during lockdown were around settlement and moving into a property.

“Buyers could’t do pre-settlement inspections and moving companies weren’t allowed to work, so it did cause a lot of stress for both buyers and sellers. Then obviously a backlog for the removal companies has an impact on those following in the next couple of weeks. But we’ve had good communications from the government on the rules for lockdowns, and I’m not sure there is anything further that can be done.”

However, Tommy’s has updated it processes to cope with changing Covid circumstances.

“We operate a Covid clause in our contracts as a general rule,” Nicki says.

“But where levels are different across the country, we have improved the wording to cover this change.”

Tommy’s also used technology to help offset the inability of people to view houses during lockdown.

“Real estate is very much a ‘people business’ and needs to be transacted in person where possible,” Nicki says.

“But we do sell a lot of off-the-plan townhouses and apartments in lockdown. Better technology means we can provide 3D floor plans and panorama videos, and Tommy’s even has exclusive interactive plans where buyers can insert furniture, remove walls and redecorate a room virtually.

“We can also get Sale and Purchase agreements signed digitally, which removes the hassle of printing and signing and scanning lots of pages. So it’s amazing what is possible to achieve in lockdown, but for an existing house, there is nothing like getting the ‘feel’ of a place.

“That’s why I think it is critical to get through a place in person before you buy.”