PROPERTY INSIGHTS

Last weekend our agency held 122 open homes, and the most popular one was one of our colleague’s listings in Mt Vic - proving that our neighbourhood is still one of Wellington’s most coveted. I start with that good news to soften the next piece of information, that REINZ shows the median price decrease last month was 11.7%. Ouch.

As much as anything, I think this shows that it is best to take figures with a grain of salt and a healthy sense of the bigger picture. This significant drop in the median price is probably more reflective of the listings that sold in that period being typically lower value properties, than suddenly $100,000+ coming off the value of your home in one month.

Outside of this monthly blip, the figure that might make you feel like this amount has been wiped off your value of your home is the latest round of Rateable Values that have come down approximately 24% in our neighbourhood. If this brought our rates down as well, we would probably all be cheering, but as you will no doubt know (councils aren’t that flush with cash), your percentage of the total Wellington pie remains largely the same, and so do your rates.

So how will the buyers view this change?

In reality they should ignore the RV just as they have been for the past three years. The only issue I can see already playing out in the conversations I have been having with buyers, is that they have become quite used to market value for property being about 25% below RV. Now buyers will need to get comfortable paying a price either around, or perhaps even above the new RV.

I imagine there will be at least a month or two while buyers recalibrate with this new data point in mind, and then we should be back to business as usual. Market value is simply market value and rateable values are just there to set your rates and nothing more. Recent sales in the area and other competing properties on the market along with strategy and marketing are the only drivers of market value. Not RV.

The total number of listings for Wellington city on NZ’s main property site, TradeMe, sits at 963 as I write this. We expect to break the 1,000 threshold shortly. Having lots of listings is fine if there are also lots of buyers, so what are we seeing at open homes? Good numbers! Our average open home attendance has started stronger than what we were seeing at the end of last year. Another promising sign is how many new buyers we are meeting.

If a buyer has been to a Lowe&Co open home previously, they will be in our database and their details show up when we enter their phone number at the door of an open home. What James and I have been noticing at this early stage of the year, is that a number of buyers we are meeting are not in our database yet, meaning they are new to the market.

Many of these buyers will require a period of research, visiting open homes, and potentially missing out on properties with highly conditional offers. But once this initial research period is over this group will be making offers and buying properties. My gut feel is that this will mean any capital growth, if we have some this year, is likely to come in quarter three and four, when the new buyers start successfully buying.

In the meantime, good to see the numbers are strong at Mt Vic open homes – long may that continue!

Source: REINZ Suburb Report January 2025.