Wellington Market Update | November 2023
Wellington’s housing market is expected to pick up post-election as buyers and sellers get to grips with new government policies that may help to stimulate activity.
“Since the election, we have seen a lift in listings and appraisals, and sales have shown a modest increase,” Tommy’s Sales Director Tim Clark says.
“In the first week of November, Tommy’s sold 16 properties and there were 45 offers across these sales.
“This indicates that the market will continue to get busier, although buyers seem cautiously optimistic.
“They’re waiting to see how the new government’s policies unfold before making substantial decisions.”
Tim says the new government may implement policies that affect housing affordability, taxation and lending rules.
“Typically, we see a period of adjustment as the market responds to new legislative directions, with long-term effects becoming clearer over time.”
What are implications for the Wellington market if the new administration rationalises the civil service?
“While cuts to the civil service could impact local demand, Wellington’s market is somewhat insulated due to its status as the capital,” Tim says.
“Factors like limited housing stock and sustained interest from immigrants are likely to mitigate any potential downturn in house values.
“In each election cycle we see new government implement new projects, which require new staff, and this goes some way to mitigating potential job loses within the sector.”
Tim says Tommy’s expectations of a recovery in house values are “cautiously optimistic but slightly more conservative” than economists who predict rises of 10-15 per cent over the next couple of years.
“Predictions depend on several variables, including interest rate trends, economic growth, and housing supply dynamics.
“A 10-15 per cent rise seems plausible but is contingent on these factors remaining favourable.”
Property data analyst CoreLogic this month reported new figures “confirm 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.”
But CoreLogic acknowledges variability remains an issue in Wellington, and Tim agrees.
“Conditions in Wellington are more nuanced than other centres,” he says.
“While signs of recovery are present, calling the downturn over is premature.
“We’re observing stabilisation in certain segments, yet the market is still sensitive to external pressures like global economic trends and national policy changes.”
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