This job isn’t what most people think it is. As soon as you sell a house, you are unemployed so unless you’re talking to people daily it’s likely you are going to run out of operating capital fast.
Across the past ten years, Amanda and I have been involved in BNI which is a very structured, old school networking group. BNI is not filled with large corporates. It’s made up of small businesses and one man bands who drag themselves out of bed at 6.30am week after week with the goal of surviving, possibly even thriving, in the often harsh New Zealand business environment. Each group is made up of one representative from a wide range of industries. These range from trades to legal services, accounting to design and in the case of Amanda, even a professional gift buyer! It’s because of that breadth of industry that you do get a front line insight into how the economy is tracking.
Last month’s Barometer referred to some small green shoots we have started to see in the Wellington property market. And anecdotally it would appear our industry is not isolated. Across my group, referrals are picking up and where previously businesses have had significant capacity, now it’s not uncommon to hear ‘I’m actually quite busy’. So, are things getting busier?
Wellington Sux
The media has placed significant focus on Wellington’s woes across 2024. Headlines of widespread redundancies, construction blow outs, hospitality and business closures are almost a daily occurrence. While it pains me to write this, the capital, once known as the brown cardigan, shorts and long socks city, has been here before.
Wellington is a city full of bureaucrats. While the rest of the country may love to hate them, they play a vital role when it comes to the functioning of government services. This pool of people is generally well educated, which of course is a huge positive for the workforce, but perhaps because of this they’re not the greatest when it comes to optimism. And that’s what’s lacking in our city at the moment; optimism and fun.
We used to be a fun city. We were known for our fine eateries, cultural scene and boutique shops. We stood proudly behind the title ‘Coolest Little Capital in the World’. For now, while we endure the creation of cycle lanes and rebuild of key public spaces, we need to refocus on the positive. We have an awesome city. Nestled below the hills and lined with our rugged coastline, we have the most beautiful harbour. And when the wind is low, Oriental Bay is the best beach in the country. I know it doesn’t seem like it now, but I’m positive we can be cool again.
Greed
The long list of businesses shutting their doors continues to grow. While this feels like just another nail in the coffin, the silver lining is that it’s likely to force landlords to look at incentives to entice businesses back to their premises.
Across the last ten years, just as with most assets, market rents have escalated, and landlords have moved their contracted leases to match. A quick 101 on commercial leasing, rents are reviewed in line with the market, they go up but it’s unlikely that they drop as ratchet clauses prevent that from happening. If you ever have spoken with a retailer, they are likely to regale you with stories of how annual rent increases and ever tightening margins make it almost impossible to survive. As new businesses seek premises, landlords should be looking to incorporate rent free periods and commercial fit out contributions. The city is ripe for a new wave of small business growth, and a helping hand will speed up this much needed process.
Money’s getting cheaper
The US Federal Reserve cut their official cash rate in September and the real estate memes took off. Finally American real estate agents were excited about the market again.
In Australia the growth stats across the country tell a very interesting story. Growth on pre covid Victoria prices came in at the lowest rate of 12%, with Western Australia and Queensland averaging rates in the 60’s!
Back here in NZ, outside of Wellington, we are circa 10% above pre covid pricing. So, on an annualised basis that is price growth of 2.5% per annum across the last four years which is significantly below inflation. If we were to prove the old adage of “your house doubles in value every 10 years” right, the housing market will need to grow by 15 % p.a for the remainder of the decade. With our current economic outlook this is likely to be a tough ask, although any interest rate drops will help that along.
The Wellington Market
The last few weeks have continued the positive trend with cash unconditional buyers out in force in the auction rooms once again. Across the past two weeks our team had seven registered bidders attend the auction for 3 Heke St and six on 27 Crofton Rd. This level of interest has been unseen since March of this year. While it’s encouraging to have the buyers back, prices are holding relatively steady for well-maintained homes and for any needing work, the only way is down.
October is going to be a huge month for listings which will bring plenty of choice to the buyers once again. This increase in stock will keep prices in check with buyers quick to move from one property to the next with little thought. A word to vendors, carefully considered pricing will be the difference between selling well and not selling at all. It’s going to be a busy couple of months.
Wellington Market Quick Stats
What’s on in Welly?
2024 World Press Photo Exhibition, Asteron Centre, 21 Sep-13 Oct 2024
The World Press Photo Exhibition is a travelling exhibition of the winning photographs. The images on display represent the pinnacle of photojournalism. They were selected from 60,000 entries submitted by photographers from 130 countries. This year’s three-week exhibition features winning photographs from four categories. The ‘Singles’ category showcases individual photographs that capture pivotal moments. ‘Stories’ present a series of images that delve deeper into specific narratives. ‘Long-Term Projects’ highlight photographers who commit years to documenting complex issues.
Click here for all the details
Divas! St James Theatre, 5 October 2024
The ultimate party showcase is heading to St James Theatre. Divas! celebrates some of the most heralded female artists and vocalists of recent times. Led by three of New Zealand’s own vocal royals, the show is packed with crowd favourites. Join The Lady Killers — Jackie Clarke, Tina Cross, and Suzanne Lynch. They will take you on a smash hit tour of six decades of songwriting. You’ll hear the best songs made famous by Dolly Parton, Aretha Franklin, Whitney Houston, Stevie Nicks, Tina Turner, Beyoncé, Adele, and Nina Simone. There are plenty more songs from other famous divas as well.
Click here to book your tickets
Tokomanawa Queens 2024 Tauihi Basketball Aotearoa competition, 04 Oct – 24 Nov
This season Wellington’s Tokomanawa Queens will be looking to reclaim the Tauihi Basketball Aotearoa title they won in 2022.
The 2024 schedule features five teams from around the country. They’ll contest 30 games across a 10-round regular season. The top four will play in championship games on 22 December. The Queens are scheduled to play on their home turf at Te Rauparaha Arena in Porirua and also at TSB Arena in Wellington.
Meet the Ben Stevens & the Team
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.
