The Lower Hutt residential market continues to experience rapid price growth with the median sales value reaching a record $520,100 over the June 2018 quarter, up 4% on the prior quarter. This trend looks set to continue over the September 2018 quarter with the median value for July and August already sitting at $525,000.
When smoothing quarterly fluctuations the 12 month moving average has witnessed exponential year on year growth. Since the start of the current growth cycle (May 2015 to August 2018) the median value has increased by a total of 42%.
Transaction counts remain at elevated levels in the Lower Hutt market, over the June 2018 quarter, a total of 447 properties were transacted, up 2% on the prior quarter. This level of sales activity is well above the long term average of 388 transactions per quarter.
Market dynamics in Wellington remain tight with the amount of property available to sell continuing to sit at historically low levels. For the month of August 2018, just 982 properties were available to sell, less than twice the historical average of 2,310. Based on current levels of inventory and assuming no new stock is added to the market, all existing stock would sell down in just 7 weeks.
Tight market conditions in Lower Hutt are illustrated by the number of days it takes for property to sell sitting at just 39 days over the June 2018 quarter. Although the days on market figure has come off the recent low of 30 days in the September 2016 quarter, this average remains well above the long term average of 50.
Proportionate shares of differing price brackets in the Lower Hutt residential market shows the transitioning in value bands. The number of properties sold for under $400K has continued to decrease year on year, holding just 24% of the market in the 12 months to August 2018.
The proportion of sales between $400K and $1M dollars continues to increase its market share, over the 12 months to August 2018, 73% of all sales were in this price bracket, up from 49% for the same period in 2016.
When breaking Lower Hutt down to a suburb level, the value distribution and level of growth in different areas is clearly illustrated. The strongest upward movement in values, when comparing the year to August 2016 with the year to August 2018, were witnessed in Wainuiomata, NaeNae and Belmont, up 46%, 37% and 34% respectively. Over the shorter August 2017 to August 2018 period, value growth was witnessed in all analysed suburbs except for Woburn, Boulcott and Eastbourne who witnessed a 0.4%, 3% and 6% decrease in value respectively.
The number of new residential building consents issued over the year to July 2018 has bounced back from the same period a year earlier, up 67%, indicating a supply response to demand in the area.
Over the year to July 2018, townhouse and apartment accommodation held a 28% share of all consents issued, well above the 12% share witnessed the year prior. This trend is likely to continue as the disconnect between high demand and limited supply persists.
Net international migration into Lower Hutt City has remained positive since April 2015, peaking in August 2017 at a total of 522 net migrants. Over the 12 months to August 2018, the net gain of migrants was 260, over two and a half times above the long term average of -165.
These high migration levels, tight inventory conditions and historically low interest rates should continue to support residential values going forward.
Lower Hutt Hot Spot Map – Year to August 2018