Just $10,000 shy of becoming a $1 million city, the capital has recorded its first $2 million suburb.
According to the latest OneRoof-Valocity figures, Wellington's median house price has reached a new high of $990,000.
The suburb of Oriental Bay now has a median property value of $2.195 million - a 20 per cent increase on last year.
Tall Poppy Real Estate owner Michael Seymour said the result was not particularly shocking, as a waterfront suburb close to the city.
What was more surprising was to see Wellington's median property value so close to Auckland, where the median value was $1.21 million according to the OneRoof-Valocity figures.
"If you walk down the streets in Wellington and did the same in Auckland you wouldn't think they would be closely matched in house prices," he said.
James Wilson, valuations director at OneRoof's data partner Valocity, said Wellington had been known to trail behind Auckland over the past decade.
"The capital's housing market has long been seen as the poor cousin to Auckland, but it has been gaining ground in the last couple of years, with the post-Covid house-buying frenzy accelerating the increase in property values."
The hottest suburb in the Wellington market was Mount Victoria, with median house prices at $1,290,000, compared to $950,000 in 2019 - a 36 per cent increase.
Island Bay also saw a 35 per cent increase in median price, from $875,000 last year to $1,185,000 in December 2020.
Seymour told OneRoof that Wellington stock levels were up but properties were selling way faster than this time last year.
"Median days on market is 21. A year ago it was 35, so things are selling much, much faster," he said.
"We've never seen the numbers at open homes we're seeing now."
Two-bedroom properties were looking to be some of the most popular, being seen as more affordable for first-home buyers.
Seymour said the market would continue to heat up.
"The only levers around the demand thing would be interest rates and capital gains tax, neither of which look like they're going to be tampered with," he said.
"None of the other little drivers, the LVRs and so forth, seem to really have much impact."
"All of a sudden property is the thing everyone wants to get into."
He said interest rates were also a big factor.
"The difference between 2.5 and 5 per cent interest rates is a massive amount of money."