Hard to rent in Wellington? Buying's no better

Thursday, 9 March 2017

It now costs a lot more to live in Wellington.

The squeeze is well and truly on in Wellington's property market, new data shows.

The city's rents have risen to record levels. It was reported last week that 40 tenants lined up to view one flat in the inner-city suburb of Mt Cook.

Now, data from Trade Me Property shows that buyers have significant challenges, too.

The capital's average asking price rose 2.6 per cent between January and February, to hit a record $528,000.

* Capital rents jump 10 per cent, and are set to go higher

Head of Trade Me Property Nigel Jeffries said it was the fifth record price recorded in the city in the past six months.

'We've seen massive demand from renters in the region and the for sale market is in a similar boat,' he said.

'There are huge numbers of people looking and the supply of houses for sale just isn't getting anywhere near that demand. That's resulted in a surge in the average asking price of almost $60,000 over the past six months, which is more than 12 per cent.'

It is a relatively recent change for Wellington.

Between January 2008 and January 2015, the city's average asking price only increased $10,000.

But since then, it has jumped more than $100,000.

On a national level, the property market was getting back to normal after two months of falling prices, Jeffries said.

The national average asking price increased 1.5 per cent in February.

The biggest increase compared to the year before was Otago, where prices were up 22.7 per cent. That was followed by Northland, up 19 per cent.

Gisborne's average asking price fell 2.6 per cent over the same period.

Jeffries said Otago's price had been pushed along by Queenstown, which is the first place in the South Island to have an asking price of more than $1 million.

Southland has seen significant activity, too. The average asking price hit a record $269,700 in February, up $10,500 since January. It is the fourth consecutive record month for the region, which is traditionally one of the most affordable in the country.

Auckland returned to growth in February, up 1.2 per cent on the previous month. There, prices are up 10.9 per cent year-on-year, with an average of $906,350.

Demand for smaller homes was high in February, Jeffries said. The average asking price of one- and two-bedroom houses increased 12.9 per cent year-on-year, compared to 9.8 per cent for houses with five bedrooms or more.

In Wellington, the smallest houses increased in price by 17.1 per cent compared to 2016, while the asking price of five-bedroom-plus houses dropped slightly.

The average asking price for an Auckland apartment hit a record high of $622,400. 'Christchurch was not left behind either, where the apartment market has surged as more and more new inner-city apartments hit the market. In the Garden City the average asking price of apartments is up $97,650 in the past year to $442,650,' Jeffries said.