Wellington market moves on

Wellington's market is moving on post-earthquake

Following some shaky, sleepless nights for many Wellingtonians, the city started to assess the damage to both buildings and infrastructure.

There was some significant damage to a number of government and CBD buildings, one of which was found to have people living in it.

Not surprisingly, the residential property market was a little quieter over this time. But the word on the street is that it is now heading back to business as usual.

Capital Property Investors Association vice president Adam Cockburn doesn’t think the earthquake is going to have a lasting impact on the Wellington property market.

“It was a shock to the system but, ultimately, it was just a bump on the road. You get bumps all the time – be they new taxes or LVRs from the Reserve Bank. It’s just that this one was a geological bump.

“The short-term impact is that people become scared and pull their horns in. They become passive bystanders or observers of the market.

“But once they realise that the world is not going to cave in and that life will carry on, they tend to get back out into the market. And everything returns to normal.”

Further, buyers who need a new home won’t stop looking for one because of the earthquake, he said.

“It is possible that some people with properties in coastal locations and/or apartment buildings who were thinking of selling might be more likely to sell now.

“But the supply of stock on the market was very low, so that is not likely to make much of a difference.”

This earthquake was very different to the Christchurch earthquakes back in 2010/2011, Cockburn said.

“They had a huge impact on the market because there was significant damage to a lot of residential housing – to the point where it was uninhabitable and a lot of people were displaced.

“People needed places to live so the market was swamped at a time when there had been a significant reduction in the amount of stock available. That had a huge impact on the market.”

In contrast, while this earthquake has displaced some apartment dwellers, they are in nowhere near the numbers displaced in the Christchurch earthquakes and most of them have not been displaced permanently.

Cockburn said that, for these reasons, he does not see the earthquake having any long-term influence on the capital’s property market.

Realestate.co.nz national property management specialist Vesna Wells said supply in Wellington’s rental market might get a little tighter.

“Supply was already low because people have been staying put because the housing market in Wellington has been so buoyant of late.

“This means rents were being pushed up and that might increase a bit now. But the extent of the damage from the earthquake wasn’t enough to put significant pressure on the market.

“And now we are heading into the January-February period which is always a busy period in the rental market anyway.”

Wells, who is herself a Wellington based investor, said the earthquakes have left many people – both property owners and tenants – quite frightened.

“But, as it turns out, not many people would own or rent a property which has been permanently damaged by the earthquake.”

Dealing with any difficult housing situations caused by the earthquake now requires good communication and guidance between property owners, tenants and property managers, she added.

Last week, the Infometrics Regional Hotspots 2016 report identified Central Wellington as one of the top 10 areas in the country poised for stellar population growth over the next decade.

At the report launch, Infometrics chief forecaster Gareth Keirnan said the earthquake didn’t change the dynamics that would drive that growth.

He expects Wellington to move on from the earthquake relatively quickly - but he said the Christchurch earthquakes showed that it can take longer than anticipated.