Wellington Housing Market Trends Hinge on Interest Rates and Public Service Cuts

Date Published: 2 January 2024

Key Facts

• Median house prices in the Wellington region fluctuated between $733,000 and $805,000 in 2021.
• The most and least expensive suburbs were Seatoun ($1.7 million) and Wellington Central ($466,200) respectively.
• Real estate agent Craig Lowe predicts that interest rates will largely determine housing market dynamics in 2022.
• The details of Finance Minister Nicola Willis’s plan to restore interest deductibility for rental properties are due later this year.
• According to CoreLogic’s head of research, Nick Goodall, the falling of interest rates could lead to an increase in demand.
• The Government’s plans for the public service and potential job cuts create uncertainty for Wellington housing market.
• Greater Wellington Regional Council’s Transport Committee Chair, Thomas Nash, advocates for higher-density housing for the Wellington’s future.

Article Summary

Last year, Wellington’s median house prices varied between $733,000 and $805,000, as per the data provided by property investment firm Opes Partners. Real estate agent Craig Lowe anticipates that Wellington’s house prices in 2022 will be significantly influenced by changes in interest rates. Despite expecting an upsurge in the number of houses on the market, Lowe does not predict large increments in prices this year.

In her mini-Budget, Finance Minister Nicola Willis pledged to revive interest deductibility for rental properties, with finer details set to be disclosed later this year. Nick Goodall, Head of Research at CoreLogic, sees this move as unlikely to have a substantial impact, but a fall in interest rates could spark a surge in demand.

However, uncertainty surrounding the government’s plans for public services, with potential job cuts in the pipeline, add an element of uncertainty to Wellington’s housing market. Goodall suggests that this could impact growth in Wellington relative to other large city centres such as Auckland and Christchurch.

Greater Wellington Regional Council’s Transport Committee Chair Thomas Nash highlights the need for a shift towards high-density housing, which is not only environment and infrastructure-friendly, but also helps spread the financial load among more ratepayers.

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