Residential property values in the Kapiti Coast market have continued to rise over the first half of 2017. The local median lifted by 1.9% and 1.2% in the March and June 2017 quarters respectively, reaching a new record of $495,000. Compared with the same quarter a year earlier, values in the Kapiti Coast residential market were up 15.1% or $65,000 over the June 2016 quarter. Much of this increase was achieved in the final quarter of 2016 with the continued lift over subsequent quarters having cemented the new price levels.
Roading infrastructure investments, which include the Kapiti expressway and Transmission gully, significantly promoted Kapiti Coast’s connection to the Wellington CBD and airport. With the reduced journey times, the Kapiti Coast residential market is appealing to a broader buyer base. In addition to the increase in demand for the area, the local market is also influenced by the surge in regional prices.
In line with national trends the local market has seen a decline in sales activity over recent months, the result of tighter credit conditions and, more recently, the normal uncertainty which elections bring to the markets. The slow down in sales activity has however, within the Kapiti Coast area been less marked than elsewhere in the country. When the June quarters of 2017 and 2016 are compared, the fall in sales activity was just 5.7% with 279 sales completed over the June quarter. In addition to the influences referred to above, sales numbers within the Wellington region are also influenced by the shortage of stock. Statistics released by the realestate.co.nz indicate a continued fall in inventory and the weeks to sell inventory figures in the Wellington region which has been the tightest market in the country for some time. In June the weeks to sell the total inventory figure stood at only 6.3, this figure is based on current sales activity assuming no further listings are taken on. June was the 20th consecutive month where Wellington had the lowest weeks to sell inventory among all other regions.
The acceleration in value appreciation witnessed over the twelve months to June 2017 resulted in considerable changes to the distribution of price brackets between 2016 and 2017. In the year to June 2016, the $200K-$400K price bracket comprised the largest proportion of sales within the Kapiti Coast area. In the year to June 2017, the share of this sector is less than half that recorded by the $400K-$1M bracket which now comprises 65% of all sales.
When individual suburbs are analysed, Paraparaumu, Paraparaumu Beach and Waikanae have been the top 3 suburbs in terms of sales activity. Between them these suburbs made up 56% of total sales. The highest median prices, over the same period, were achieved in Peka Peka, however, it should be noted that there were only 5 sales in this suburb over the analysis period. Peka Peka was followed by Waikanae Beach and Paekakariki.
In terms of property types, standalone houses continue to form the largest sector of the market by some margin, comprising over 90% of sales over the twelve months to June 2017. This figure is all but unchanged from that recorded in previous years. Townhouses, form the second most transacted property type in the local market, but made up only 5% of all sales over the same period.
Recent months has seen a response from the development sector to the rise in demand and values which have been evident in the local market over the last two years. Over the twelve months to June 2017, a total of 291 new residential building consents were issued. This equates to a 51% increase compared with the same period a year earlier. However, construction activity remains below its historical average and the number of new residential buildings are unlikely to significantly impact dynamics within the local market over the short term future, particularly given the tight market conditions prevalent within the wider Wellington region. With its connectivity to the rest of the region set to continually improve over the next few years, the Kapiti Coast residential market will be increasingly influenced by the conditions of the wider region which has been the tightest of the country for almost two years.
SALES HOT SPOTS – Kapiti Coast Residential Sale Prices (2017 HY1)