Wellington values down nearly 30%, leaving some owners trapped
Some Wellington homeowners are facing losses of hundreds of thousands of dollars after buying during the property boom of 2021-22, with values in the capital now down by as much as 30%.
Wellingtonian Dylan said he and a friend are preparing to take a $300,000 hit on their Porirua “doer-upper,” purchased for just over $700,000 in 2021.
“But with everything becoming more expensive, that sort of fell away from us,” he told 1News.
Now, with a baby on the way, they feel pressured to sell.
“We just need to stop the bleeding,” Dylan said.
He estimates the house, now in a dismantled state, may only sell for a little over $400,000 – just enough to cover the mortgage.
“Both of our KiwiSavers were drained to purchase this house and now we are sort of back at square one,” he said.
Still, Dylan said he is trying to stay philosophical: “We’ve made our bed and now we have to sleep in it... there’s no point in dwelling on it.”
Paying mortgages into their 80s
Chris and his partner bought a beachside home in 2022 after securing a windfall job. But when Chris lost that role and interest rates jumped from 3% to 7%, their finances unravelled.
“[It was] incredibly difficult, incredibly stressful, very tiring – lots and lots of sleepless nights, very tricky mental health wise,” he told RNZ. “With the circumstances changing so quickly... we just found ourselves kinda... in free-fall essentially.”
The value of their home has fallen by more than $200,000, and their retirement savings have been drained.
“We’ve had to extend the length of the mortgage out to the max of course, and now it looks like I’m going to be paying a mortgage into my 80s,” Chris said.
Real estate agent: A ‘frenzy’ unlikely to return
Tommy’s Real Estate chief executive Ben Castle (pictured) said the COVID-era housing frenzy was driven by cheap credit, low supply, and high demand.
“They’re just times that you’d never really see ever again and that just created the frenzy,” Castle told 1News.
QV data shows Wellington values have dropped sharply, with Wellington City – West down 29.9% from its peak, and Lower Hutt falling nearly $300,000 since 2022. Castle said job losses in the capital have also reduced the pool of buyers.
“If you had bought in those big heights post-COVID and are having to sell now — that is a short window and there will be a value decrease,” Castle said.
Families delaying plans
Tim, who stretched his budget to buy a larger home in Lower Hutt, is more relaxed about the $200,000 drop in value because he has no plans to sell. But for Tori and her husband, the downturn has put family plans on hold.
“We initially thought that we’d take about a $50,000 hit on the house, which was a bummer but manageable, and that number just kept creeping up to $80,000 and now over $100,000,” she said.
The couple had hoped to upsize for a yard and extra bedroom. Instead, Tori said: “My husband and I have said, ‘Well we can’t have a second baby, if we have to stay here there’s just no space.’”
While grateful for their current home, she admits it’s difficult letting go of the life they imagined: “You mourn it a little bit I think, what could have been – having young kids running around — but it’s just not the reality.”
Muted recovery ahead
Westpac forecasts New Zealand house prices will stay flat in 2025, with just a 0.6% gain and Wellington values down up to 30% since 2021-22. Reuters reports average prices are expected to rise only 1.3% this year, as lower rates fail to boost demand amid rising unemployment and weak sentiment. Both expect only gradual price growth in 2026.
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