3 May 2017

Wellington's house prices soar, as others come off the boil

From Morning Report, 7:12 am on 3 May 2017

Wellington houses prices are soaring, up 21 percent in the last 12 months.

In comparison the increase in average house prices in Auckland is slowing and even dropping in some suburbs.

Overall, Auckland house prices rose 11 percent in the past year-- the slowest rate of increase since 2014 -- but they were down 0.4 percent in the latest quarter.

A queue forms for an open home viewing at Leeds Street apartments in Wellington.

A queue forms for an open home viewing at Leeds Street apartments in Wellington. Photo: RNZ / Michael Cropp

In the capital, more than 170 groups recently viewed an inner-city apartment that's expected to go for a third more than its rateable value of $290,000.

A Wellington real estate agent with Tommy's, Nicki Cruickshank, says there are so few listings in the capital that when houses go up for sale, they're snapped up quickly.

She told our reporter Michael Cropp the growth in house prices is now slowing a bit but it's still hard for first home buyers.

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Property developer Kurt Gibbons and Tommy's real estate agent,Nicki Cruickshank, look at a brochure for a 17 townhouse development. Photo: RNZ / Michael Cropp

Jonno Ingerson, the director for CoreLogic

Jonno Ingerson, the director for CoreLogic Photo: RNZ

Jonno Ingerson, the director for CoreLogic, which runs the QV website says investors are still finding ways of getting into the market.

He says the rise in Wellington is due to an extreme case of supply and demand.

"There's not enough stock. There's only about half the number of homes that are on the market than a year or two ago."

The general manager of the Wellington Night Shelter, Kirsty Buggins, says the rise in house prices in the capital is also pushing up the numbers of homeless in the city.

"We are seeing more people who are coming to us as a result of the fact that they haven't been able to continue their tenancy due to increased house prices. Or who aren't  able to enter the private rental market at all."

Wellington mayor Justin Lester

Wellington mayor Justin Lester Photo: RNZ / Aaron Smale

Wellington's mayor, Justin Lester, says there is not a housing crisis in the capital - but there is a need to build more houses.

In April Wellington City Council announced plans to give first-home buyers of new houses a one-off $5000 rates discount.

Mr Lester says there has been a recent spike in housing consents and he hopes that this year around 2,000 new homes will be built - a record number.