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Core Logic Wellington Central

Kelvin Davidson, Senior Property Economist, Corelogic


1 November 2019

The Data

Rental data is sourced from the Ministry of Building, Innovation and Employment (formerly the Department of Building and Housing) based on rental bonds lodged. This rental data is supplied to us, grouped into geographic areas based on statistical area units used by Statistics NZ for the census, and as a result do not always match well with common usage suburb names.

The rental data for each area is matched to house price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median house value calculated using our E valuer.

Market Composition

In contrast to the majority of other rental markets across New Zealand (which are dominated by houses), Wellington Central is an apartment market. Of the 614 properties recently on the rental market, 429 were apartments (70%), and only 103 houses (17%). The remainder (82 properties, or 13%) were flats.

Te Aro has the most apartments (185), with only six flats and five houses in that area. Lambton has 89 apartments, Wadestown/Thorndon (46), Mt Cook (43), and Mt Victoria/Roseneath (42). The highest proportion of apartments in any of these areas is Te Aro (94%). The lowest is Kelburn/Aro Valley, at 35%.

The flipside is that Kelburn/Aro Valley has the most flats (21), just ahead of Mt Victoria/Roseneath (20). Kelburn/ Aro Valley has the highest share of flats amongst its rentals, at 30%. Mt Victoria/ Roseneath is the largest market for houses (42), ahead of Kelburn/Aro Valley (24), and Wadestown/Thorndon (23). Mt Victoria/Roseneath’s concentration of houses is also the highest, at 40%.

Apartment Size, By Bedroom Count

The vast majority of apartments in Wellington Central are one or two bedrooms. None have four bedrooms,

only 17 have three bedrooms (all in Te Aro), and only eight have five bedrooms (all in Mt Cook). There are 244 onebedroom apartments across all areas, and 160 have two bedrooms.

Te Aro has the most one-bedroom apartments (103), with Lambton second at 51. All other suburbs have 20 to 30. Kelburn/Aro Valley actually has the highest concentration of one-bedroom properties amongst its rental apartment stock, at 75%. That’s followed by Mt Cook, at 63%.

Te Aro also has the most twobedroom rental apartments (65), followed by Lambton (38). Wadestown/ Thorndon has the highest concentration of two-bedroom apartments in its rental stock (52%), with Mt Victoria (45%) and Lambton (43%).

Rent And Yield

By matching average value to rent we can look at gross yields for one-bedroom apartments in each area. The table below does not provide a median property value for Kelburn/Aro Valley, Mt Victoria/ Roseneath, or Wadestown/Thorndon because there haven’t been enough comparable sales of one-bedroom apartments to generate reliable estimates.

Median weekly rents for one-bedroom apartments across Wellington Central vary quite a bit, from $365 in Kelburn/ Aro Valley, up to $500 in Mt Victoria/ Roseneath. In Mt Cook, Te Aro, and Lambton, rents are more closely bunched from $380 to $420. Of the suburbs where property values are provided, Lambton is the cheapest for a one-bedroom apartment (median of $266,650), with Mt Cook the most expensive ($371,050).

Yet with rents in these markets relatively similar, Lambton easily has the highest gross yield, at 8.2%. Although they’re lower, yields on one-bedroom apartments in Te Aro (5.6%) and Mt Cook (5.3%) are still pretty decent by national standards and compared to other property types.

In terms of rental growth, one bedroom apartments in Wadestown/Thorndon have spiked by 30% over the past year, with Kelburn/Aro Valley also showing strong growth (10.6%). In contrast, rents in Mt Cook have dropped over the past year.

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