Most New Zealanders are back into the swing of things with the summer tan fading away under the office desk. Over summer we noticed a large number of real estate related articles on sites like Stuff and The New Zealand Herald. And we’re still seeing them now. The vast majority of these articles are positive for property owners but less so if you’re looking to buy. So, what does 2021 have in store for the property market?
If you believe everything you read house prices are set to soar with one Newshub article claiming we’re at the beginning of a 7 year upswing in real estate. It would appear the hype is filtering through to the buyers, especially those looking for their first homes. During our first week back doing open homes we averaged over 60 groups through each open home. After chatting with one of the attendees they mentioned that they wanted to get a jump on any upcoming activity. But it would appear everyone else had the same idea.
The issue with making predictions is you tend to use a lot of assumptions to form those predictions. The old saying goes ‘when you assume you make an ass of u and me’. Because the vast majority of predictions are positive this has led to a sugar rush of activity as owners start to factor in growth before it has even happened. Real estate has always been a long-term investment: buy, hold and then realise the capital growth at the end. When markets run hot many people are looking to enter, buoyed along by the success of earlier adopters. But if the market starts to flatten out these parties tend to exit because they are less interested if they’re not getting double digit growth
Money & The Government
Last month Westpac came out with a 2.25% mortgage rate. This feels completely insane and must be giving the government some concerns about the continued growth in house prices. Each time the rate drops it increases the budget of those looking to buy which in turn leads to higher prices paid. All the while incomes haven’t gone up. It will be interesting to see what approach the government takes to tackle this issue as it will require bold and maybe unpopular policy.
Where are the industries?
Property value growth in the smaller regional towns has been insane. Gisborne was boasting a 30% gain in values over the last 12 months. Historically property price gains in smaller, regional areas were led by economic growth in that particular area. My question is: what growth has there been that underpins the latest property growth? Wellington is different as we have Government, corporates and universities that underpin the region.
The Wellington Market
As mentioned earlier, the year started off with a hiss and a roar with buyers returning energised from the holiday break. As long as the media keep reporting on a booming industry, buyers stay engaged and rates stay low. So, how can much change? Will Covid come back and have an impact? It would appear we had a narrow escape from the recent Northland ‘outbreak’. But what does the rest of 2021 have in store for us? Let’s see what happens.
Wellington Market Quick Stats:
What’s on this February in Wellington?
Wellington Wine & Food Festival, Waitangi Park, 13th February
Get yourself a glass of top notch local wine, a plate of delicious food, breezy Kiwi talent and you’ve got yourself the Wellington Wine and Food Festival.
Making the most of our late summer days, the festival showcases a variety of local and international wineries and breweries, as well as chefs and foodies known for their tasty bites.
Six60 Live At Sky Stadium, 105 Waterloo Quay, 13th February
SIX60 is bringing the people what they want with a huge stadium concert supported by a line-up of Kiwi superstars.
SIX60, the hottest name in New Zealand music right now, recently released a documentary that tells the story of the five-piece band and how they grew from their Dunedin student roots into an award-winning, chart-topping and stadium-filling phenomenon.
Wellington’s Round the Bays, Frank Kitts Park Te Aro, 21st February
There’s nothing quite like the rush of accomplishment that comes from crossing the finish line of a run or walk. Take that thrill and add a number of other enthusiastic runners of all ages and abilities, live entertainment, spot prizes and stunning views, and you’ve got Wellington’s Round the Bays.
The fun run/walk event offers five different courses to choose from, depending on the distance you want to cover and if you want to go solo or take your little ones. On the website you’ll find shorter 6.5k courses, including options for those signing up with kids, a 10k track and a 21.1k course.
If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always happy to help.