There are now just seven suburbs in Wellington with median house values of less than $1 million, a new property report has revealed.
The OneRoof property report for May has revealed escalating prices across the capital since New Zealand emerged from lockdown 12 months ago.
The suburb of Mount Victoria recorded the biggest increase, jumping from less than $1 million in May 2020 to $1.51 million last month.
This is a jump of $525,000, reflecting a 53 per cent increase.
OneRoof editor Owen Vaughan says the figures for Mount Victoria represent how much the Wellington market had shifted in the past year.
"12 months ago, lockdown had been lifted and house values were reasonably affordable to many people," he said.
"There were only about half a dozen suburbs in Wellington that had median values over a million dollars and quite a few that had median values around 600,000 dollars.
"Fast forward 12 months and you see that half a dozen suburbs have median values of less than a million dollars, and only one – Wellington Central, which is mostly apartments – has a median value below 500,000."
The 12-month increase for Mount Victoria was $150,000 greater that the next largest increase, which was recorded in the suburb of Grenada Village, in Wellington's north.
Grenada Village had a median house value of $795,000 in May 2020, which had risen to $1.17 million in May 2021.
It also recorded the biggest five-year jump, escalating from $480,000 in May 2016, reflecting a 144 per cent increase.
In third place was Berhampore, with a 47 per cent 12-month increase, followed by Aro Valley with a 45 per cent increase since May 2020.
The stark comparison between the five-year change and the 12-month change also showed how rapidly the market had accelerated post-Covid, Vaughan said.
"If you take Mt Victoria as an example, if you look at what property prices were like five years ago – it was around about $650,000," Vaughan said.
"It's seen a growth of nearly a million dollars in that five-year period but a large chunk of that has been just within the last year.
"A lot of that is to do with the fact that these are central suburbs, reasonably desirable, they've got good stock in them.
"Mount Victoria, I would say is now reasonably comparable to Ponsonby."
Meanwhile median prices in the district of South Wairarapa, which is just three towns - Martinborough, Greytown and Featherston – had risen by 52 per cent in 12 months.
The median value as of May 10 this year was $821,5000 compared with $540,000 a year ago – that's a 12 month increase of $281,500, according to figures from OneRoof's data partner Valocity.
Wellington had been one of a handful of regions throughout the country that had seen increases of more than 30 per cent.
A "perfect storm" of low interest rates and changed plans for first-home buyers had driven house prices up.
"The biggest factor of property rises in New Zealand as a whole, and Wellington, have been the low interest rates," he said.
"First home buyers who may have been thinking about it in a couple of years have brought their plans forward.
"People who may have been sitting on money in the bank have looked at it and decided they're going to get a better return if they put that money in property."
He said the Wellington market, which had long been "undervalued", was starting to catch up to Auckland.
"It's now caught up and then some. It's not far off where Auckland was a year ago.
"The rest of New Zealand used to look at Auckland and go 'that's crazy, imagine paying a million dollars for a house'.
"That's not the case any more, Wellington is just as hot as Auckland is and the prices are just as crazy."
He said the big question would be how the market responded within the coming year.
"The budget forecast was that house price growth would slow to under 1 per cent in the next 12 months and the governments has obviously backed that some of the changes to the investment tax rules will have a slowing effect on the market.
"But one thing is for certain, the changes that have happened in the last year – those price increases – it would take a massive economic upset for prices to go back to what they were pre-Covid."