Property prices in the New Zealand capital of Wellington rose by a whopping 9% last year, and the rental market also saw an uplift as supply falls short of demand.

According to state-owned valuer Quotable Value, house prices in Wellington hit an average of NZ$787,740 (around £400,000). Meanwhile, the Auckland regional rise in the year to January was far more subdued at just 0.7% – meaning that values in New Zealand’s biggest city now average $1,054,974 (£515,000).

Property price rises set more of a medium pace throughout the rest of the country, up 6.4% annually to reach $671,531 (£350,000).

David Nagel, general manager of Quotable Value, said: “Values in Auckland are now rising with quarterly growth up 1.6% which is a greater increase compared to the last quarter of 2017. The Wellington market continues to rise, however value growth has slowed in the Hutt Valley.”

Strong competition

Nagel added: “The Christchurch market remains flat while the Dunedin market continues to see a trend of steady value growth seen there throughout 2017. Market activity across the nation appears to be picking up now that people have returned to work from the holiday season.”

Wellington rents also rose during 2017, with a lack of housing supply, coupled with increasing population, both putting upward pressure on residential values.

“This tight supply is creating strong demand for vacant land and new builds, particularly in the outer Wellington regions including Churton Park, Grenada and Aotea,” said QV Wellington senior consultant, David Cornford. “We’re also seeing strong competition in the $1m to $1.5m range for family homes, particularly if the property is well presented and in a popular suburb such as Karori or Khandallah.”

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