Photo: RNZ / Richard Tindiller
Average Wellington house values have plummeted nearly 25 percent over three years, according to latest official valuations.
Wellington City property owners will soon get their new ratings valuations which were recorded 1 September 2024.
On average compared to the 2021 valuations, the value of residential housing had decreased 24.4 percent with the average house value now sitting at $1,086,000.
The average land land value decreased 36.7 percent to an average of $621,000 over the same period.
QV chief operating officer David Nagel said rating valuations were like a snapshot of the market at a point in time.
"When these were last set, back in 2021, the market was obviously rising very quickly, buoyed by record low interest rates.
"It then experienced some steep declines in 2022, influenced by higher interest rates and tighter credit conditions, as well as a higher rate of inflation and unemployment."
He said the latest valuations were reflective of a market that was still being affected by strong economic headwinds.
"Sales volumes have reduced, and sentiment has changed markedly from being a sellers' market to being a buyers' one."
Commercial property values decreased by 21 percent , and property values in the industrial sector have decreased by 12.2 percent since the city's last rating valuation in 2021.
Wellington City Council's manager of financial operations Michael Nyamudeza said it was important that property owners remember that a change in the rating valuation of a property does not mean rates will change by a similar percentage.
He said the council used property values to allocate the rates it needed to collect across all ratepayers - it did not collect more rates because values had increased, and it did not collect less rates if values had decreased.
Rates increases for each property depends on a range of factors, including:
- the Council's overall rates 'budget' calculated each year in the Annual Plan.
- the capital value change for your property compared to the average change
- any change in the mix of services the council provides
- any change in targeted rates or the council's rating differential.
Lowe and Co managing director Craig Lowe told RNZ the changes in house prices matter most to those that bought during the peak of the property boom in 2021.
Lowe said that was due to the potential for those people to be now faced with a situation where they could have negative equity or the majority of their equity wiped out.
"That's where this would be affecting those people quite negatively."
Many of those property owners may be in a position where they would have to wait for house price inflation over time to restore equity in the property before selling, he said.
QV data showed that Crofton Down, Ngaio, Miramar, Strathmore Park, Kelburn Central and Northland were the suburbs that saw the biggest value drops.
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