Green shoots in Mt Vic’s property market

Green shoots in Mt Vic’s property market

PROPERTY UPDATE

Wellington’s property market is in the doldrums but Mt Victoria is doing better than most of the city, reports Anji Foster from Lowe&Co.

For those looking to sell a house at the moment, it can be hard to find the glass half full story. It has been a difficult few years since the acknowledged peak of the market late 2021, and the challenges are continuing for many areas in 2024.

When looking specifically at Mount Victoria however, there are a few green shoots. The first is that whilst the Wellington City real estate market is down 14.1% compared to 3 years ago, the figure for Mt Victoria over the same period is -9.8%. This is reflective of the continued premium that property in our area achieves, supported by a high percentage of buyers specifying Mount Victoria as one of their preferred search areas.

Looking at prices over the past year, Wellington City is down 1.6% with a median price of $880,000. But in Mount Victoria, we are 1.3% down on last year with a median price of $1,116,000. This median is higher than neighbouring Hataitai ($970,000), Mt Cook ($695,000) and Roseneath ($1,100,000), and slightly lower than Oriental Bay ($1,200,000).

Also supporting the glass half full sentiment is that the average numbers of days to sell in our neighbourhood is currently 32 days, compared to one year ago when it was 54. Much of this will be due to the shortage of new Mt Vic listings in the area coming to the market, and therefore less choice for genuine buyers.

In terms of the rental market, there is currently an abundance of available rental properties in Wellington, causing an imbalance in the supply and demand equation. Many homes that have not sold are now on the rental market as plan B for the owners. Reduced student numbers in the capital, and tertiary institutions offering halls of residence to second year students have reduced student accommodation demand, and many tenants are choosing to stay put while they work through potential uncertainty around job security.

Any property provider who has been trying to lease a property in this market will tell you it’s tough finding a tenants and even tougher getting the rent that the property might have received during the last tenancy.

In Mount Victoria the median weekly rent is $580, which represents a 2.7% rental yield when looking at the current median sale price. Not a great return in anyone’s books. There are currently 57 rental properties in Mt Vic on Trade Me, with the oldest of these dating back to earlier this year, and the majority having been listed for at least two months.

This winter is unlike any I have worked in, with the number of listings on the market significantly higher than what we would historically expect. Lowe&Co had one of our largest listing months in May, which is unheard of, and the listings have continued to come on in their numbers over June. July is the first sign of a slight slow down, and already the difference in buyer activity is evident. As the number of listings on the market drops slightly, open home attendee numbers are increasing, with slightly less choice for buyers. We have also seen a small improvement in the number of properties receiving offers, and some prices coming through that are above what we were expecting. So whilst our glass isn’t over flowing, there is some reason to feel optimistic.

For any data specific to your own property do not hesitate to reach out.

SOURCE: Suburb Report June 2024 REINZ. Anji Foster is Licensed under REA 2008.