Where are areas in Wellington which have experienced an increase in property values?What are the reasons for this?

Many suburbs in Wellington have seen huge increases in property values, even in the space of a year. For example in 2005 there was a 10.5% total increase in the average capital value of houses in Wellington City. Other specific suburbs however have seen a much bigger increase. Below is a table showing average capital value and percentage change for houses in Wellington in 2005.


Table showing percentage increase and house prices in Wellington for 2005. NB: Largest percentage changes in bold.Average CV & % change for Residential Houses (excludes flats & apartments). Values as at 1 September 2005

Suburb Average Capital Value Average % Change
Horokiwi, Makara, Ohariu $352,200 13.10%
Churton Park, Johnsonville $361,400 11.50%
Newlands, Paparangi, Woodridge $298,900 13.10%
Broadmeadows, Khandallah $544,100 10.80%
Crofton Downs, Ngaio $426,300 8.10%
Wadestown, Wilton $524,500 12.10%
Kelburn (Central), Northland $568,500 11.80%
Karori $452,700 9.80%
Brooklyn, Kingston, Owhiro Bay $422,800 8.50%
Island Bay, Houghton Bay $445,800 10.10%
Oriental Bay, Roseneath $941,300 10.30%
Hataitai $525,700 10.20%
Kilbirnie, Lyall Bay, Rongotai $390,800 12.00%
Melrose $426,900 8.00%
Miramar, Strathmore Park $469,500 9.50%
Seatoun $736,000 9.80%
Thorndon $661,500 17.90%
Kelburn (North), Te Aro $798,600 6.20%
Aro Valley, Highbury $435,200 7.10%
Wellington Central $246,800 9.90%
Te Aro Flat) $523,000 10.60%
Mount Victoria $602,700 8.30%
Berhampore, Mt Cook, Newtown $392,300 8.40%
Tawa (East) $315,000 18.10%
Tawa (Central) $308,600 15.20%
Tawa (West) $289,600 8.60%
Tawa (South) $373,600 16.10%
Wellington City Total $442,800 10.50%

Statistics Taken from The Wellington City Council. http://ww.wellington.govt.nz/services/rate/newss/ratesvals.html

Graph showing largest percentage changes in Wellington house prices in 2005.

Graph showing average capital value of residential Wellington suburbs

As you can see from the graphs and table above the areas which have experienced the greatest property increases in Wellington are as follows:
· Horokiwi, Makara, Ohariu
· Churton Park, Johnsonville
· Newlands, Paparangi, Woodridge
· Broadmeadows, Khandallah
· Wadestown, Wilton
· Kelburn(Central), Northland
· Island Bay, Houghton Bay
· Oriental Bay, Roseneath
· Hataitai
· Kilbirnie, Lyall Bay, Rongotai
· Thorndon
· Te Aro Flat
· Tawa (East)
· Tawa (Central)
· Tawa (South)

These places have all had an average percentage increase of over 10%. Suburbs in the northern part of Wellington which were previously seen as the 'cheaper areas' have seen the biggest increase in house prices. In particular Tawa, Newlands, Paparangi and Woodridge have increased between 13.1% and 18.1%. One reason for this could be that places such as Johnsonville and Porirua can provide residents in these areas with services that previously they might have had to travel to Wellington City for. The growth of both the Johnsonville and Porirua malls encourage people to live out in the suburbs that were previously undesirable because of their location from the city. Another reason for such increases in these areas is that previously their value was low and when they see an increase the percentage seems larger, when if you compare the real figures they are still pretty low.

However Karori, Churton Park, Kilbirne,Te Aro and Wadestown are all be desired because of school zoning. Churton Park and Karori both boast decile 10 primary schools which for parents who cannot afford private education but wish to have the 'best' public education may spur them to purchase in certain suburbs. This of course does not only go for primary schools, but also popular secondary schools such as Wellington College and Wellington Girls' College. It is proven that being in zone for highly sought after public schools can increase your property immensely.

Places that have undergone re-development such as Oriental Bay have seen a huge increase in the capital value of houses in the last 10 years particulary within the last 5.

Taken from the Alexander Turnbull Library. Reference Number: PAColl-8557-18. www.teara.govt.nz/

This is a picture of Oriental Bay in the 1920's. As you can see there is not a lot of beach and the sand is not soft and bright, it is grey and stony.

Image taken from the Wellington City Council. www.wellington.govt/nz/move/enlarge

Now days with the $7.5 million revamp completed in December 2002 people in summer flock to Oriental Bay in the truckloads. The beach did of course take truckloads to redo, I am of course referring to the 22,000 tonnes of golden sand from the northern South Island. This is how the beach has managed to create the golden coloured sand people love rather than the old dingy,rocky sand.The beach combers are not the only ones wanting to get in on the action however. Since the redevelopment house prices have continued to soar as the highest valued suburb in Wellington.

Of course suburbs within walking distance to the city are always going to see in increase in property values, as transportation becomes more expensive along with the expense many forms of transportation cost our environment. As people become increasingly aware of the environmental effects of some modes of transportation we will see in the near future even more importance based on having housing within walking distance to work, school and play.

Through answering my specific research question I can draw the conclusion that urban gentrification has an effect on house prices. The upgrading of both housing and shops can increase a suburbs property values immensely. This can be seen for instance in Tawa and Newlands which saw the greatest percentage increase in property values in 2005. Both suburbs were previously thought of as a middle-low income neighbourhoods, but now with houses being gentrified property values are on the rise. Of course it is extremely rare for a house to decrease in value but gentrification definitely does play a significant role in raising house prices further.