Wellington house values jump 60 per cent, average land value more than doubles

Wellington's new valuations, taken on September 1 this year, are the first official update on RVs since 2018. Photo / Mark Mitchell

The value of the average Wellington house has increased by more than 60 per cent in the past three years, and land value has more than doubled.

There are now no Wellington suburbs with an average value below $1m, and a handful now above $2m.

Rating valuations (RVs) for more than 80,000 properties in the capital have been released today on behalf of Wellington City Council by Quotable Value (QV).

The average residential home has increased in value by 60.4 per cent in this time, with the average house value now $1.435m.

This figure is for houses only, while the average 2021 RV for all residential properties in Wellington - including standalone houses, terraces, units and apartments - is around $1.245m.

The new valuations, taken on September 1 this year, are the first official update on RVs since 2018.

QV area manager Paul McCorry said it was unsurprising the figures reflected an "extremely buoyant" market in the capital.

"In 2018 we were exclaiming at the number of million dollar suburbs in the city," he said.

"In 2021 there is not a single location with an average value less than $1m – in fact, Kelburn, Oriental Bay, Roseneath and Seatoun have now pushed over $2m."

Tommy's real estate sales director Nicki Cruickshank said this showed the growth in the Wellington market over the past year.

"We definitely know there's been incredible growth in Wellington for the last three or four years but that's a milestone – everyone's a millionaire."

But she sounded a note of caution for home owners checking their RVs today.

"Take it as what it is – it's for council to work out rates on your property, it's not an actual valuation. Take it with a grain of salt probably."

Suburbs such as Oriental Bay now have an average value of more than $2m. Photo / Mark Mitchell

Rating valuations are carried out on all New Zealand properties every three years. They serve as a rough "shorthand" for what properties might sell for and provide data that informs how councils set their rates.

Rating valuations prepared for 80,336 properties show the total rateable value for the Wellington City district is now $123,219,693, with land value at $79,045,542,201.

McCorry said much of the value increase had stemmed from the pressure on land, which had more than doubled in two years to $985,000.

"We have started to see developers looking to demolish modest houses on sections with development potential."

"Rapid intensification is the model. It is not an exclusively Wellington City problem, but one that is exacerbated by the physical constraints to urban sprawl."

Since 2018 property values in the commercial sector have risen by 36.1 per cent and industrial property values by 60.6 per cent.

Land values in the commercial and industrial sector have seen an increase of 52.2 per cent and 73.1 per cent respectively.

A change in land use from commercial to residential has pushed up the average value for commercially zoned land by 52.2 per cent.

"We have seen huge demand for redevelopment land on the city fringes," McCorry said.

"Areas such as Te Aro, Mount Cook and Newtown, where you are in walking distance to the CBD are ideal for apartment living, and developers have been purchasing under-utilised sites to satisfy that need."

Meanwhile the average value of an improved lifestyle property had increased by 55.57 per cent to $1.6m, with land value jumping 91.18 per cent to $1.025m.

McCorry said just over 500 lifestyle properties made up a modest but buoyant part of the Wellington City market.

New ratings would be posted to property owners after December 8, and they will have the opportunity to object their property value until January 29, 2022.

Individual property ratings are also available for owners to check online.

Council's financial strategy and treasury manager Marty Read said property valuations informed how rates would be allocated among ratepayers, but rates are decided by more factors than simply the property's rateable value.

Rates would not increase substantially where a property's increase in RV was similar to the average across the city.

But if a property sees an increase significantly higher than the average increase across the city, more of the rates budget would be assigned to that property.

The actual rates increase would also depend on factors such as the council's overall rates budget - calculated as part of the Annual Plan - the change to the mix of services provided by council, and any change to targeted rates or council's rating differential.