With us soon entering the new world of post-lockdown Core Logic Property Data and Westpac have released market updates on the Wellington Property Market and it's future.
Property Listings in Wellington
Before lockdown the property market was thriving, but how will the market look post lockdown? In the Core Logic update, property expert Nick Goodall believes after lockdown we may see an increase in listings, as some people will have a change in circumstance or may need to raise some capital due to uncertainty. Other people may find that after 5 weeks of lockdown their house is too small, desire to change the location they're in, or even see post-lockdown as an opportunity to consider new prospects in other areas. Before lockdown there was a rise in first-time rental property investors across Wellington who may also decide to sell, perhaps due to the lack of capital behind them or lack of confidence, creating an opportunity for more experienced investors who have more capital, leverage, and experience.
Housing Prices & Affordability in Wellington
Westpac expects the removal of LVR restrictions, record-low OCR, and low interest rates will make mortgages more available and less costly over time, which will help the property market over the next few years.
"Once the virus disruption passes and confidence eventually returns, low interest rates will result in a very fertile environment for asset prices, including house prices" Westpac says.
Westpac forecasts house price growth will remain modest next year, before experiencing rapid gains during 2022 and 2023.
Impact of Airbnb on Rental and Sales Market
With the tourism sector and Airbnb taking a plummet, many Airbnb accommodation owners will be re-looking at their strategy. Some may sell, others may consider fixed term tenancies as a solution.
Unlike other areas in New Zealand where up to 20% of residential properties in the area were listed on Airbnb in March 2020, Wellington only had 1.1% of properties listed on Airbnb according to Core Logic Property Data. So even if these Airbnb properties do flood the rental market, it's unlikely there will be too huge an impact on prices.
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Article written: August 2020