The Kapiti Coast residential market continues to record unprecedented growth year on year, reaching a record median value of $532,950 over the June quarter of 2018. Values are up a significant 48% (or $172,950) since the start of the growth cycle in September 2015.
Sales activity remains strong with the number of transactions witnessed in the June quarter 2018 up 11% from the March 2018 quarter and up 6% when compared to the same period a year prior in the June 2017 quarter.
The Kapiti Coast residential market has gone from strength to strength as more people discover its attractions. The laid back and relaxed area provides an affordable entry point into the Wellington market. Add to this the benefits of reduced travel times to Wellington City once the safer, four lane Transmission Gully motorway is completed in 2020, and it is likely interest in the area will continue to grow. In addition to Kapiti’s appeal, there are a number of key drivers which are expected to push values higher.
International net migration into the Kapiti Coast District has witnessed a strong recovery since mid-2014 with positive net migration peaking at 290 in the 12 months to January 2017 and remains at elevated levels. Over the 12 months to July 2018, the net gain of 193 migrants is more than 5 times the long term average of -37.
Equally, interest rates remain at historically low levels with every indication suggesting they are likely to remain lower for longer. Capacity constraints within the broader construction sector are also expected to limit the supply of new homes. All these factors are contributing to the value growth observed within the Kapiti Coast residential market.
Value growth across all suburbs within the Kapiti Coast is evident when comparing the year to July 2018 with the prior year to July 2017. The largest growth in median value was witnessed in Te Horo and Otaihanga where the median value increased by 37% and 24% respectively, however it is important to note the relatively small number of transactions which could sway price movements. The strong growth witnessed in each of the suburbs underlines the strength and demand for residential property throughout the entire Kapiti Coast District.
Proportionate shares of differing price brackets over the past three years illustrate the increasing values witnessed within the Kapiti Coast. The number of transactions completed for over $1 million dollars has experienced a year on year increase and now constitutes 3% of total sales. The proportion of sales between $400K and $1 million dollars has also increased, moving from 48% of total sales in 2016 to 78% in 2018.
Market conditions within the Wellington region are amongst the tightest in the country with inventory at historically low levels. These tight market conditions are exacerbated due to the development sector being slow to respond to demand. Currently, existing stock would take 7 weeks to sell down, significantly below the long term average of 17 weeks.
The total number of new building consents issued in the Kapiti Coast has decreased by 24% over the 12 months to July 2018, further contributing to limited stock. Stand-alone residential houses continue to dominate the construction sector, making up 90% of all residential building consents issued in the year to July 2018. The number of consents for townhouse accommodation has also increased, making up 13% of all consents issued in 2017 and 9% of all consents issued in 2018, indicating an increasing trend towards intensified stock in the district.
Kapiti Coast Residential Hot Spot Map – 6 Months to June 2018