Wellington Market Strong in Opportunities
For those of you looking to invest in a solid market with good returns, Wellington is still the place to be. I would like to give you an update on the Wellington market as I see it and offer some slightly different views.
The Wellington region has one of the lowest number of listings in New Zealand (by population), however listing numbers certainly have increased in the last few weeks. At the lower end of the market, including traditional investor buying, the prices are still high and continuing to grow at a slower level. Vendors are expecting top dollar and demand is still strong. This makes finding a deal a challenge but if you are able to offer cash, that puts you in a stronger position than buyers who might be relying on kiwisaver or a longer finance period..
Wellington is city prominent within the public sector along with a strong university population and major hospitals. These are mainly within a 4km radius making investment properties very sought after in these areas, as well as properties close to Courtenay Place.
This is the part of the market where I like to invest in “buy & hold” properties. These areas are more expensive than the outer suburbs and can offer a better yield if you are able to spend around $1m or more. You will most likely need additional funds to address the “deferred maintenance” and also add value with another bedroom or bathroom. These areas are in high rental demand and it is difficult to see that changing. Increased demand factors include free first year tertiary education along with an extra $50 per week student allowance. There is a generally accepted acknowledgement of student rental shortage so you will likely be rewarded if you are able to add another bedroom or 2 or even another dwelling.
On saying the above, there is certainly a decrease in demand at this level and sales are well down on last year, but this creates real opportunity to the active investor who is not afraid to do some renovation work and watch the rent come in 52 weeks a year!