Wellington’s real estate market is on the rebound, with sales increasing over summer.
Figures from the Real Estate Institute of New Zealand show sales across the country in February were 37% higher than in February 2011.
In Wellington sales grew from 556 to 683 over the same period, a rise of almost 23%.
While volumes were up, prices often were not, with the average sale price in the Hutt Valley dropping from $370,000 to $330,000, while in North Wellington the average price dropped $40,000 to $445,000 compared to February 2011.
John Ross from The Professionals Lower Hutt says the start of 2012 has been the best for a number of years. “We’ve had four pretty ordinary years for real estate. But you can’t hold the market back forever.”
Mr Ross says people now see real estate as a long-term investment, with fewer market participants seeing property as a way of making quick capital gains. “People don’t anticipate prices will go up a lot. But they don’t expect them to go down. They’ve got over the fact of expecting big changes.”
He says prices in Petone are strong. However there are low volumes but strong demand. In Eastbourne and the bays there are low volumes but strong demand for well-presented properties.
As to what will happen to the market for the rest of 2012, Mr Ross is reluctant to make predictions. “I’ve given up making predictions. But there have been no surprises in the international economy this year. Is that the new norm?”
Elliot Falconer from Harcourts says the recovery in the property market appears to have had less of an impact in Wellington than in most other regions. “Prices have gone up everywhere except in Wellington. People have money but they’re shy about spending it.”
Mr Falconer says February’s sales numbers were encouraging. “February 2011 was particularly bad. In the old days we’d do a 1000 a month. So we are travelling at 40% down. But this February was still better than February 2009, 2010 and 2011.”
He says banks are now willing to lend up to 90 and 95% of valuation, showing they believe the market is on the rise. Continuing low interest rates are also helping to make housing more affordable. “If you’re looking to buy there’s never been a better time.”
Real Estate institute Wellington vice-president Euon Murrell says February was a good month and March was the same. “I sense there is a little more confidence coming into the market. Buyers are making decisions – there’ve been 19 sales above $1 million.”
Mr Murrell says the increased activity is happening across the board. But he urges caution. “One should not get too excited over month of sales. But if this trend continues for three or four months then it is significant.”