Wellington Rental Market | November 2023

A National Part-led government is likely to boost investor confidence in Wellington’s residential market, Tommy’s Director of Property Management Harrison Vaughan says.

“Now may present a good opportunity for investing in residential property, considering the National Party’s potential policy reforms.

“The current high bank interest rates present a significant hurdle, yet for 

cash-ready investors and those looking for long-term growth, the Wellington market offers diverse opportunities that could well outweigh these financial barriers over time.

“Tommy’s have even managed to secure lucrative multi-year leases for luxury properties, demonstrating the strength of this market segment.”

Harrison says investors anticipate that the new government might relax the Brightline test and tax deductibility rules.

“This would create a more favourable climate for property investment and making property investment more viable for a wider group of investors.”

What are the key factors that will encourage small investors back into the market?

“Small investors might re-enter the market, drawn by these proposed tax adjustments that promise a more profitable investment journey,” Harrison says.

“Additionally, the availability of rental properties has increased, providing a wider selection for investors.”

He points out there already has been a spike in investor interest post-election, “fuelled by the expectation of beneficial changes to tax laws.

“We have already seen an increase in the number of properties on the market from around 500 to over 750 for rent in Wellington.

“However, the enthusiasm is tempered by the reality of high bank interest rates, which raise the cost.

“This situation might restrain a robust comeback, particularly for those investors who rely on loans to finance their purchases.

“It will be cashed-up investors making most of the purchases at present.”

Harrison says the Wellington rental market is always changing, adjusting to the influx of housing and significant infrastructure improvements.

“While this puts pressure on the value of older rental stock, the demand for spacious city-fringe homes remains high and will continue into the summer.“

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