A year of capital gains wiped out in Wellington as house values drop

PHOTO: NZ housing. FILE

House prices are back to where they were a year ago in the Wellington region, according to the latest Real Estate Institute of New Zealand’s House Price Index.

The index provides a measure of price movements that is not skewed by volume or type of homes selling, which can affect median price estimates.

Auckland was the second-worst performing region, with institute’s April House Price Index registering a 2.4% fall in a month, which left prices in the country’s most populous region up 5% in March compared to a year before.

Lowe and Co estate agent Adam Cockburn said the number of homes for sale had reached the highest point since June 2015, meaning buyers in Wellington had greater choice and less time pressure.

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**Craig Lowe of Lowe & Co Realty says in the housing market, “history didn’t repeat, but it rhymed”, suggesting prices are likely to stabilise at some point and then remain flat for a long period.**

He said the time taken to sell a home in the city had also jumped from 28 days in March last year to 42 days last month, an increase he put down to FOMO (fear of missing out) disappearing.

The Real Estate Institute’s latest Monthly Property Report also highlights the 42 days now taken to sell in Wellington is well above the 10-year average for March of 30 days.

Trade Me’s Property Price Index for March shows the number of listings in the Wellington region was up 78% compared to the year before, the highest number of properties for sale on record in the region.

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“While supply skyrocketed in Wellington last month, demand in the region grew by a comparatively small 2% year-on-year in March,” Trade Me property sales director Gavin Lloyd said.

The Real Esate Institute’s report says Wellington’s House Price Index is the worst performer of all regions over the past month, quarter and year.

April’s index report shows values had fallen 4.7% in the Wellington region over a month, and 6.4% in the last three months, leaving values only 0.3% above where they sat a year ago.

Wellington prices had fallen further, dropping 5% in one month and 7% in three months, leaving them 0.3% below where they were a year ago.

House values in Lower Hutt were 4.4% down on where they a year before, Upper Hutt was 0.5% up, and Porirua remained 2.9% up.

House prices countrywide fell 2.1% in a month in the April index, but remained 9% up on the year before.

Cockburn said before homeowners became too fixated on value falls, they should keep in mind they had enjoyed five years of the biggest capital gains on record.

He said a lack of properties on the market was a common complaint in recent times and fed into the idea there were not enough homes, but what it actually meant was sales were outpacing listings.