It’s that time again: for a quick update on what’s been happening in the Wellington property market, and anything else pertinent!
Last week was a busy one for me – I’ve secured my first Board position, attended the New Zealand Art Show, assisted with the Relay for Life as the daughter and her friends were keen, and also managed to get 45 mins one-on-one with one of the banks’ Chief Economists. All while still kicking goals, helping clients into homes!
But enough about me.
First up, let’s look at the Wellington property market by the numbers, for the end of April (all courtesy of REINZ):
- Anecdotally, sellers are looking to meet the market more often than prior, which suggest it's still largely a buyers' market.
- It's taking an average of 45 days for properties to sell—up four days on this time last year, but down slightly compared to March.
- The total number of sales is less both compared to this time last year (down 4.6%) and last month (down 11%), but that's pretty typical as the summer season comes to an end.
- And the sale price has also fallen slighty—down 0.90% YoY and 1.90% on March 2026.
So it's still a buyers' market out there in Wellington, and when we zoom out to look at other factors we're facing—both locally and as a nation—that looks set to continue for a while yet.
The pressures that look likely to keep house prices down are really coming from three main areas.
1. Inflation and the cost-of-living
We’re not due our next lot of inflation data until 21 July, but I think we’re all seeing and feeling that the cost of living has increased.
The last report I read showed inflation expected to peak mid-2026, and hopefully track back down from there. My concern is that it could prove to be a bit stickier than hoped, but you can only control what you can control.
We all know that this is largely due to offshore events in the Middle East, however increases in power, rates and insurances are also having an impact.
For most of us, these are necessities, so unfortunately—for want of a better phrase—we’ve just got to suck it up. Can’t seem to find that option B!
2. Bank funding costs are on the up
We haven’t had an increase in the Official Cash Rate just yet, but that will come sooner than later—and in the meantime, banks have pre-emptively moved a number of mortgage rates north, some economists say by far enough that any OCR increase is already baked in.
I’m not as confident. We’ve got our next OCR announcement coming up on 8 July, and I think we could potentially see some jostling a week or two prior.
In fact, at the time of writing, one of the banks has just announced increases to their fixed term rates ranging from six months through to three years. And the rest will no doubt have followed by the time (or shortly after) this has been published.
Now these first two challenges are closely linked.
The RBNZ will increase the OCR in order to reduce spending, and in turn inflation. What we’re seeing is that the banks are moving interest rates north regardless (due to their funding costs), doing the RBNZ’s job for them, to an extent.
The recent split decision from the RBNZ was telling, and my gut says they should have moved as they know what the data is going to say, but the wait-and-see approach, depending on how things play out in the Middle East, could still play favourably.
On that note, I believe the US will come to a temporary resolution in the lead up to the US mid-terms – with President Trump likely wanting to provide a bit of a sugar hit for the US public a couple of months out. He’ll get through that sense check, and then get back to work in earnest in the Middle East – not good of course.
3. And finally, Wellington has its own unique challenges
The main one being the current Government's plan for further public sector cuts.
This has been pegged at 9000 roles, with at least half of them Wellington-based.
There’s circa 294,000 employed people in the wider Wellington region (191,000 in central Wellington), so a reduction of 2% is meaningful, especially once you factor in the flow on impact to other businesses.
Clickbaity media headlines haven’t helped with the general sense of doom and gloom—pushing whatever narrative is going to attract the most eyeballs and sell ad space.
Overall, these factors do paint a more challenging picture, but a property price correction was well overdue, and this is just reinforcing and normalising the new standard.
It’s still a favourable market for first home buyers. And for the upsizers out there, as the old saying goes—as long as you’re selling and buying in the same market it all evens out.
This is particularly true for now, as debt levels being taken on are reduced relative to incomes—meaning you should be able to get ahead and quit debt sooner – this is applicable to both categories to be fair.
Interest rates will go up and down over the course of your loan, but the debt level figure is locked in at settlement—something purchasers in 2021 know all too well.
And at the end of the current state of play, the sun will rise, and we’ll have more favourable conditions on our hands, as the property market is in a perpetual cycle.
This quote from author Michael Hopf is one that rings true in this instance (despite the very dated wording):
“Hard times create strong men. Strong men create easy times. Easy times create weak men, And weak men create hard times.”
Bring on the good times!
About the author: Nick Virtue, Squirrel Mortgage Adviser - Wellington
Nick cut his teeth inside the big banks—racking up 15 years' experience across SME, franchise, health and large corporate clients—before taking the leap to become a mortgage adviser in 2020. As one of our resident Wellington home loan experts, Nick knows the Capital (and its housing market) like the back of his hand. Whether working with clients or chatting to media, he has a way of breaking down the complex world of mortgages into simple, easy-to-understand language.