All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Wellington's property market is included in our pack
Thinking of buying a property in Wellington? You're not alone!
Many people are enchanted by Wellington's creative vibe and dream of owning a contemporary apartment or a charming townhouse there.
Does it make sense from a financial perspective, though? Are property prices increasing in Wellington? Is it expensive? Is it wiser to invest in Te Aro or Mount Victoria? What are the property taxes? Can I get a very good rental yield? Where?
We know the answers.
The BambooRoutes team has done their homework and know this market well. Actually, we've gathered all our findings in a pack. Get it now.
In this article, get ready to receive valuable insights from us.
How's the property market in Wellington?
Is the property market going up or down? Let's look at fresh data and statistics.
Types of properties
In Wellington, you can find a variety of properties for sale, including houses, apartments, townhouses, and land.
Houses provide more space and often come with yards, while apartments offer convenience and shared amenities. Townhouses are a mix of both, offering a balance between space and maintenance.
If you're looking to build your own home, there's also land available for sale where you can construct your dream house.
Each type of property offers different features and benefits, allowing you to choose based on your preferences and needs.
Buying or renting?
(If you're keeping it for yourself and not renting it)
If Wellington is your city of choice, you may be thinking about the advantages of buying versus renting a property in this picturesque capital city of New Zealand.
Without a doubt, you should buy if you want to acquire equity and have the potential to benefit from future property price appreciation.
One data can help you make a decision - the property price-to-rent ratio. It's a way to understand how many years of rental income you need to cover the property's current price.
According to Numbeo, the property price-to-rent ratio in Wellington is around 22.94, which is around the world average.
This value shows that it would take you 23 long years of paying rents before you can own a property in Wellington. Renting for such an extended period means you wouldn't be building any equity, and you might end up spending more money without gaining ownership of the property.
Property prices in Wellington
On average, according to the last data from Quotable Value, purchasing a property in Wellington will cost you around $7,650 per square meter.
Clearly, there is a substantial range. The value of a square meter for a property in Wellington might differ from a suburban house in Karori. We actually offer a more in-depth analysis in our pack for buying property in Wellington and in New Zealand.
To put things in perspective, it is 2.5 times less than the property prices in the center of New York.
Also, housing prices in Wellington are 12% cheaper than in Auckland.
The most expensive neighbourhoods in Wellington are probably Oriental Bay and Seatoun, while the cheapest are probably Naenae and Taita.
Trends
First and foremost, we have to acknowledge that New Zealand is, today, an exceptionally stable country. The last Fragile State Index that has been reported for this place is 17.5.
Keep this in view when pondering the viability of buying a property in in Wellington.
Also, according to the International Monetary Fund (IMF), New Zealand's economy is expected to soar by 8% in the coming 5 years, resulting in an average GDP growth rate of 1.6%.
If you intend to invest in real estate in Wellington it's a good thing because rising prosperity among individuals signals a probable upturn in housing prices.
Also, in New Zealand, the average GDP per capita has changed by 4.6% over the last 5 years. Though not substantial, there is still a positive trend of growth.
These are positive signals showing that property prices in Wellington might increase in 2024 and during the coming years.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in New Zealand right now.
Buying property in Wellington
Buying real estate in Wellington can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Wellington and in New Zealand.
Buying process
In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.
Now, we're presenting a simpler version to make it easier for you to understand and follow along.
This is the step-by-step process to purchase a property in Wellington:
- Determine your budget and financing options, considering factors like LVR restrictions and KiwiSaver HomeStart grant eligibility.
- Research the Wellington property market, focusing on suburbs like Thorndon, Oriental Bay, and Karori.
- Engage a licensed real estate agent familiar with Wellington's property market to assist in your search.
- Attend property viewings, paying attention to earthquake-prone building notices.
- Make an offer using the standard Sale and Purchase Agreement (SPA) with specific conditions relevant to Wellington's property laws.
- Obtain a registered valuation and seek financing approval from New Zealand banks.
- Hire a qualified lawyer to handle the legal aspects, including Land Information Memorandum (LIM) and title searches.
- Sign the SPA and obtain an official Land Information New Zealand (LINZ) Record of Title.
- Conduct building inspections and check for any previous earthquake repairs or assessments.
- Secure property insurance, considering the risks of natural disasters like earthquakes and flooding.
- Settle the purchase on the agreed date, ensuring compliance with New Zealand's Overseas Investment Act if applicable.
- Complete the legal transfer with LINZ and take possession of your Wellington property, registering the ownership with the local council.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in New Zealand.
Make a profitable investment in Wellington
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Where to find a property
Discover your ideal property in Wellington through these websites:
- Realestate.co.nz - A prominent New Zealand real estate platform offering properties for sale or rent, along with news and valuation services.
- OneRoof - An established property search platform in New Zealand, presenting listings for sale and rent, property estimates, news, and tools catering to buyers and sellers.
- Harcourts - A well-known New Zealand real estate company that facilitates residential and commercial property transactions, while also providing news and valuable resources.
- Rightmove - A specialized property website designed to assist individuals in purchasing, renting, and investing in real estate within New Zealand.
- Trademe - A leading online marketplace in New Zealand for acquiring, renting, and selling properties, alongside various other services.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in New Zealand.
What you can get
As mentioned before, the average price per sqm in Wellington is $7,650. A 1-bedroom property of 60 square meters would cost approximately $459,000, and a 2-bedroom of 85 square meters would cost around $650,000.
However, as you can guess, property prices will differ based on the attributes of the property and its specific location.
Expect property prices to be on the higher side in the premium areas of Wellington. To get a condominium in Oriental Bay, you might need around $880,000, but an apartment in Thorndon could be priced at $810,000.
However, there are also places that won't strain your finances as much. You may find a condominium in Newtown for $250,000, or you might locate one in Karori priced at $210,000.
We give a more detailed pricing list in our full pack for buying property in New Zealand.
Risks and pitfalls
Here are the main pitfalls when buying a property in Wellington, New Zealand:
- Building compliance for earthquakes: Ensure the property meets strict seismic regulations due to Wellington's high earthquake risk.
- Te Tiriti o Waitangi obligations: Be aware of Māori ancestral rights and consult with local iwi (tribes) when buying land.
- Cross-lease titles: Understand complex legal agreements with neighbors, affecting property use and renovations.
- Wind exposure: Wellington's strong winds may impact property maintenance and outdoor usability.
- KiwiSaver HomeStart grant: Navigating eligibility and application process for first-time buyers' financial assistance.
- LIM report: Request a Land Information Memorandum for essential property information, including hazards and consents.
- Erosion-prone land: Coastal properties may face erosion challenges, requiring additional protection and insurance.
- Healthy Homes Standards: Compliance with regulations for heating, insulation, and ventilation in rental properties.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our New Zealand Property Pack
Living in Wellington
Wellington is a vibrant city with plenty of cultural and recreational activities, making it an ideal place to buy property and settle down.
Cost of living
The cost of living in Wellington is relatively high compared to other parts of New Zealand. However, it is still relatively affordable compared to other cities in the world.
Here are some examples to better understand the cost of living in Wellington, New Zealand:
- A flat white coffee at a local café: $4-$6.
- Rent for a one-bedroom apartment in the vibrant Cuba Street neighborhood: $1,600-$2,400 per month.
- Monthly Snapper card for public transportation: $100-$150.
- A bottle of L&P (Lemon & Paeroa), a popular New Zealand soft drink: $2-$3.
- Utilities (electricity, heating, cooling) for an 85m² apartment in Wellington: $150-$250.
- A meat pie, a Kiwi snack, at a bakery: $4-$6.
- Entrance fee to Te Papa Tongarewa, New Zealand's national museum: $15-$20.
- Health insurance coverage for a family of four: $300-$500 per month.
Neighbourhoods and spots
Since we want to share information that's easy to read, we made a table that tells about the neighborhoods in Wellington. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
Te Aro | Te Aro is a vibrant and central neighborhood known for its eclectic mix of shops, restaurants, and cultural attractions. | Exciting nightlife, diverse dining options, and proximity to the city's entertainment hubs. | Noisy at times, limited parking spaces. |
Thorndon | Thorndon is a historic suburb with beautiful heritage buildings, home to the New Zealand Parliament Buildings and lush green spaces. | Rich history, picturesque surroundings, and close to the city center. | Higher property prices, limited shopping options. |
Mount Victoria | Mount Victoria offers stunning panoramic views of Wellington and the harbor, surrounded by walking trails and a peaceful atmosphere. | Scenic beauty, recreational opportunities, and great for outdoor enthusiasts. | Hilly terrain, limited public transport. |
Kelburn | Kelburn is home to Victoria University of Wellington and the iconic Wellington Cable Car, offering a mix of student life and scenic spots. | Close to the university, stunning views, and easy access to the city. | Can be noisy during university semesters, limited parking. |
Mt Cook | Mt Cook is a diverse neighborhood with a strong sense of community, known for its cultural events, eateries, and proximity to the city. | Close to the city center, multicultural atmosphere, and good dining options. | Some areas may lack green spaces, traffic congestion. |
Island Bay | Island Bay is a coastal suburb with a beautiful beach, a lively community, and a range of recreational activities. | Scenic waterfront, strong community spirit, and great for outdoor enthusiasts. | Can be windy, limited public transport options. |
Karori | Karori is a family-friendly neighborhood with good schools, parks, and a village center with shops and cafes. | Quiet and peaceful, family-friendly atmosphere, and natural surroundings. | Can be far from the city center, limited nightlife options. |
Brooklyn | Brooklyn is a hilly suburb with panoramic views, offering a mix of residential areas, cafes, and green spaces. | Stunning views, community feel, and recreational opportunities. | Hilly terrain, limited public transport. |
Newtown | Newtown is a vibrant and diverse neighborhood with a bohemian atmosphere, multicultural eateries, and easy access to the city. | Eclectic and lively, affordable housing options. | Some areas can be noisy, limited parking. |
Miramar | Miramar is a coastal suburb known for its film industry connections, scenic views, and a variety of cafes and restaurants. | Connection to film industry, beautiful coastal scenery. | Can be windy, limited public transport options. |
Seatoun | Seatoun is an upmarket coastal suburb with beautiful beaches, parks, and a relaxed community atmosphere. | Stunning waterfront, peaceful surroundings. | Expensive real estate, limited public transport. |
Life in Wellington
Wellington is the economic hub of New Zealand, and is home to a range of industries such as finance, IT, film and television, tourism, education, and government services. The city has experienced strong economic growth since the 2000s, and is now one of the most prosperous cities in the country.
What expats usually like the most in Wellington is its vibrant culture with a great variety of arts, music, and festivals, as well as its stunning natural beauty with many outdoor activities to enjoy.
Regarding safety, the crime rate of Wellington is around 34, which is not concerning. Wellington has a strong police presence and a low population density, which helps to keep crime rates low.
Also, you have to know that Wellington is susceptible to earthquakes and strong winds due to its location near the boundary of tectonic plates.
A good point for a property investor - Wellington has an extensive public transport network, including a modern light rail system known as the "Metro" which serves the city and its suburbs.
Access to healthcare in Wellington is very good, with a Healthcare Index of 66. You probably know that when there's a solid healthcare setup, it makes a location more appealing, which benefits real estate.
Finally, it is worth noting that the Victoria University of Wellington ranks among the top 500 universities in the world.
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Renting out in Wellington
This section is for you if you're interested in purchasing property not for personal residence, but rather for the purpose of renting it out to generate rental income.
Long-term
Tenant Profiles in Wellington
According to the data reported by Wikipedia, the home ownership rate in New Zealand is 65%, which is average.
It means that, if you decide to buy and rent out in Wellington, there will be a good number of people who can become your potential tenants.
If you decide to buy and rent out to long-term tenants, you should target professionals, students, and young families in Wellington. These tenants are attracted to the city's vibrant culture, growing job market, and excellent educational opportunities.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Wellington CBD | Professionals, students | City center, access to amenities | $1,500 - $2,500 |
House in Thorndon | Families, young professionals | Near government offices, parks | $2,000 - $3,500 |
Apartment in Te Aro | Students, working individuals | Close to universities, entertainment | $1,200 - $2,000 |
Townhouse in Newtown | Families, professionals | Residential area, schools | $2,000 - $3,500 |
Apartment in Oriental Bay | Beach lovers, retirees | Waterfront living, views | $1,800 - $3,000 |
House in Miramar | Families, film industry professionals | Suburban lifestyle, proximity to film studios | $2,500 - $4,000 |
Apartment in Kelburn | Students, professionals | Near Victoria University, quiet area | $1,200 - $2,000 |
Rental yields
Nowadays, rental yields in Wellington are usually below 5%. It's not much. A good rental yield is usually around 7% or higher. Maybe, you knew it already.
Wellington's CBD and surrounding suburbs tend to have the best rental yields due to their high demand from young professionals and students, as well as their proximity to public transport, amenities and city attractions. Properties that are affordable, well-maintained and close to amenities such as cafes, shops and entertainment venues are also likely to have higher rental yields.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Wellington are taxed at 14%, which is not much.
Short-term
You could also decide to rent short-term to business travelers, tourists, and students visiting Wellington for a short period of time. Additionally, you could rent to locals who are in need of temporary accommodation while moving or renovating their homes.
If you decide to go with that option, look for properties in the central business district, including Te Aro, Thorndon, and Mt Victoria. Additionally, the suburbs of Petone and Lower Hutt are also popular for short-term rentals.
Currently, there are approximately 3,090 active Airbnb listings in Wellington, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $133.
You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Wellington can make around $2000 per month. Also, the average occupancy rate is estimated at 75%.
Is it worth buying real estate in Wellington then?
Buying a property in Wellington is a smart move if you're looking for a long-term investment or a place to settle down. Wellington's property market is stable, and the country's economy is expected to grow, which bodes well for potential property appreciation. Plus, renting in Wellington can mean spending years without building equity. Buying allows you to start building equity from day one.
The variety of property types available, from houses to apartments and townhouses, caters to diverse preferences and needs. If you're thinking about renting out the property, Wellington's strong demand from young professionals and students provides income potential, despite current rental yields being below 5%.
However, it's not a good idea to buy a property in Wellington if you're planning a short-term stay, have financial constraints, or an uncertain future. Property transactions come with expenses, and overextending yourself financially can lead to stress. If you value flexibility in terms of location and property type, renting may be a better fit for your lifestyle.
Additionally, if you're risk-averse and concerned about market volatility, it might be best to explore other investment options.
In essence, whether you should buy a property in Wellington depends on your specific goals, financial situation, and circumstances. For long-term residents and investors, it's a promising choice, but for those with short-term plans or financial limitations, renting could be a more sensible option.
Make sure you understand the real estate market in Wellington
Don't rush into buying the wrong property in New Zealand. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.