Wellington city property valuations plummet 24%, no suburb unscathed

The average house value in Wellington is now sitting at $1.08 million. Photo / Mark Mitchell

Wellington City’s new rateable valuations show that, on average, house values have plummeted 24.4% since 2021.

Capital values have fallen across every suburb between 12.1% and 29.3%.

The average house value is now sitting at $1.08 million.

This compares with Auckland valuations which won’t be released until sometime in May at the earliest after being delayed, and are expected to show little movement from the last valuations in 2021.

Property owners in the capital will soon receive their new rating valuations in the post or via email. They will also be available tomorrow on Wellington City Council’s online property search and the Quotable Value (QV)website.

QV chief operating officer David Nagel said rating valuations were 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 land value in Wellington is overinflated, one real estate agent said. Photo / Mark Mitchell

“Now, these latest rating valuations for Wellington City are reflective of a market that is 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 have decreased on average by 21%.

Wellington City Council financial operations manager Michael Nyamudeza said the change in rating valuations did not mean rates bills would change by a similar percentage.

“The pie”, or the council’s budget, was still the same, he said.

“The proportionate change in a property will determine how that pie is sliced,” Nyamudeza said.

“So, some ratepayers will experience a situation where if the value of the property decreases to a magnitude that’s higher than the average decrease in the city, they are likely to get a rates decrease or an increase that’s less than everyone else.”

Likewise, some people could receive higher rates bills.

QV said the updated rating valuations were not designed to be used as market valuations.

“Where there are ratepayers who have concerns and want to sell their house, we would strongly encourage them to approach property valuers and not necessarily rely on the rating evaluations,” Nyamudeza said.

The average house value in Wellington City is now sitting at $1.08 million. Photo / Mark Mitchell

If owners do not agree with their rating valuation, they can submit an objection by the end of March.

Tommy’s sales consultant Sam Newble said properties have generally sold for much more than their rateable values during the 15 years he has worked in the industry.

“But when the rateable values in Wellington came out last time in 2021, that was the top of the market, and even then, they felt high at the time.

“So, now, we’re obviously at the point where the market’s changed.”

Newble said just because rateable values had fallen did not mean the sale price of a property had also dropped overnight.

Newble also stressed that rateable values were never intended as a tool for determining market value.

“They’re often set by someone that’s got information like the size of it, the address, and when it was built.

“They might not necessarily take into account things like the views, or the access, or the condition or whether it’s been renovated or neglected.”

He advised buyers and sellers to look at comparable homes which had recently sold in the same area to get a better idea of property value.

Revaluations of 82,591 properties across the city were due to be released in December, but Wellington City Council had delayed the release until February due to “complexities” with determining values in areas with limited market data.

Sotheby’s Realty agent Mike Lovell said at that time the issue with Wellington was that “everything’s so out of whack”.

OneRoof previously reported properties in the capital have been consistently selling for well under RV (rateable valuation), with many suburbs showing a 20% drop in value.

Lovell thought a rateable valuation drop “probably should happen” as there were many RVs that were not reflective of value in most parts of the city.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.