Wellington median house price approaches $1 million mark in November

Late last week the Real Estate Institute of New Zealand reported that Auckland recorded a median house price of $1.03 million in November, after making history the previous month when hitting the million-dollar mark for the first time. Now Wellington City is hot on Auckland’s heels, recording a median house price of $980,000 in November, although this is not a race we really want to join. 

At a national level, annual house price inflation of 18.5% lifted the national median price to a record $749,000, up from October’s record of $725,000, driven by record median prices in eleven of the sixteen regions. 

​At the same time, volumes sold increased by 30% nationally, with new listings overwhelmed by buyers expecting prices to rise further. REINZ CEO, Bindi Norwell, observed that “Part of this is likely to be attributed to people wanting to purchase property ahead of Christmas, partly due to the Reserve Bank announcing in early November that it would undertake a consultation in December to re-introduce LVRs earlier than planned, but also due to this underlying fear that prices might increase even further in the coming months”.
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At a regional level, Wellington was again one of the regions to register a record median price and remained the second highest regional price behind Auckland. House prices in the Wellington region were up by 14.5% over the year, to record a median price of $790,000. 

​Within the region, Wellington City prices surged 11.9% over the month and 22.5% over the year to record a median price of $980,000.  The median house price in Porirua City has fluctuated in recent months, recording an annual increase of 11.2% in the year to November to $800,500, easing from a spike of $895,000 the previous month.
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In recent months, we have witnessed a trend of people looking to the surrounding districts for opportunities to find a more reasonably priced property, particularly given new opportunities to work from home presented by our experience with lockdowns in 2020. Reflecting this, price growth has been strong throughout the Wellington region.

​Median house prices in the three districts in Wairarapa have each recorded record highs at one point in October or November:

• The Carterton District reported annual house price growth of 60.5% in November to a record median of $650,000, which was the first time the median has lifted into the $600,000’s
• Median house prices in the Masterton District increased by 31.6% over the year to $520,000, matching the record median price of a month earlier
• South Wairarapa recorded a 6.2% increase in the median price to $600,000, although prices have fluctuated in recent months and were down from the previous month’s spike of $720,030.

The Kapiti market has also witnessed strong demand amidst similar themes, experiencing a record median price of $780,000, up 22.7% on a year earlier.

​In the Hutt Valley, Lower Hutt experienced a 19.0% annual increase in the median house price to a record $770,000, while Upper Hutt recorded a 12.0% annual increase to $689,000.

​Wellington is one of the regions with the lowest inventory levels, at just 6 weeks, which in turn continues to constrain sales growth. Reflecting this additional constraint, annual sales growth of 6.3% was well below the national figure of 29.6%.

In line with these dynamics, properties in the Wellington region continue to sell quickly, with the median days to sell of 28 days reported as the lowest for a November month since 2006. The REINZ had the following observations for the region:

• Many first home buyers and owner/occupiers are missing out as they are competing with investors to secure properties
• Getting access to finance in a timely manner continues to be an issue, with most banks taking around 10 days to process applications due to the sheer volume request for loans
• On the other side, we are also seeing some investors exiting the market as the new tenancy laws approach.

Questions continue to circulate over how sustainable the current trend is and the long-term impact it is having on a generation - and sectors of society - who are being left behind by rising property prices. For the present though, demand continues to be underpinned by low mortgage rates and concerns that prices might increase further in coming months.