Wellington housing shortage

[Don't believe the Hype]

Where do you get 500k from?

$500k is about entry level for any stand alone house in Tireti Road... check guru in 2 or 3 weeks time. Anything under this level is good buying.

[Bluecoat]

What do you consider a good buy in Wellington. What sort of yields are you getting?

Has Wellington got to a price level as Auckland? DO you expect the same sort of population increase. What is driving up prices in Auckland , shortage of houses due to what ?
Keen to know what are the key drivers?

[Don't believe the Hype]

Yields vary depending on type of property and location and a number of other variables. In Porirua you can still pick up (gross) around 8% but we see some going as low as 4% (latest Tireti Road sale but was sold to a home buyer). The interesting dynamic is that rents have been growing so fast that things that were bought on a 7.5% yield only 12 months ago have seen rent increases that are now delivering 9.7%.

So one of the key differences in see with Auckland is that prices in Auckland rose dramatically with yields dropping. Here prices rose dropping rents but the rents have lifted inline with or even in excess of price growth. That would allow for further price growth if there is more people prepared to take 7.5% gross yields.

The Wellington prices gains are nowhere near the Auckland levels - they're somewhere near 30-40% above the last market peak while Auckland has doubles... Looking at the last two booms, Wellington has continued to run as Auckland flatted and pulled back. Wellington then plateaued at a level quite close to that of Auckland so if this market should follow historical trends then you could expect Wellington to continue on the current path for some time.