It’s official: Wellington now has the cheapest rents in New Zealand, and locals are feeling the shift. In a city known for its pricey flats and bustling rental market, this is big news. We sat down for a quick phone call with Billy Bell from Tommy’s Real Estate to get the lowdown on what’s happening in the Wellington property scene, and his insights paint a picture of a market that’s taken a hit but might just be showing signs of life.

First up, the numbers are stark. According to Billy, Wellington property values have generally dropped by 20 to 35% over the past three years. That’s a massive slide for a city that used to be one of the priciest spots to live in the country. In some extreme cases, flats with more than two bedrooms are sitting empty for months on end. Imagine a big old house in Kelburn or Thorndon, once packed with students or families, now gathering dust with a “For Rent” sign out front. It’s a tough reality for landlords, and it’s driving rents down across the board.

But not all properties are struggling equally. Billy pointed out that two-bedroom flats are doing much better when it comes to renting and selling. They’re the sweet spot, it seems, while the larger houses – those with four, five, or even six rooms – are sitting empty. “The big old houses just aren’t moving like they used to,” Billy said. For tenants, this means smaller flats are getting snapped up quick, while the bigger places languish.

So, what’s behind this? We estimate there are over 500 empty flats in and around Wellington right now, and that oversupply is pushing prices down even further. Properties that rely on investment income or rentals have been hit the hardest. Landlords who bought up big a few years back, hoping for steady rental returns, are now feeling the pinch as their places sit vacant. It’s a rough time to be in the rental game, and Billy didn’t sugarcoat it: “Those investment properties are hurting landlords the most.”

Digging deeper, there are some clear reasons for the slump. Billy highlighted two big factors: a drop of 10,500 students and the loss of 7,000 public servants in the city. That’s a huge chunk of people who used to fill flats and keep the rental market ticking. With fewer students around – maybe they’re studying online or heading elsewhere – and public servants leaving, possibly due to job cuts or remote work, the demand for rentals has taken a nosedive. It’s an ongoing impact that’s reshaping Wellington’s housing scene, and it doesn’t look like it’s slowing down anytime soon.

Despite the gloom, Billy had some lighter notes to share. When we asked about his favourite spot in the city, he didn’t hesitate: “My best beach is Lyall Bay.” He also dropped a bit of good news for that area – four infill development sites have sold in Lyall Bay over the last four weeks. For those not in the know, infill development is when you build new homes on smaller bits of land, often in established suburbs. “Infill looks like the new black,” Billy said, suggesting that developers are seeing potential in these projects. It’s a glimmer of hope in an otherwise tricky market.

We tried to get Billy to spill the beans on Wellington’s worst suburb, but he wouldn’t bite. “I’m not going there,” he laughed. However, he did let slip that it’s definitely not Hataitai. So, if you’re renting or buying in that neck of the woods, you might be in a safer spot than some others. Still, the overall picture isn’t rosy. Billy summed it up: “The market is still difficult, but we’re seeing signs of life.” It’s a cautious bit of optimism, but it’s something.

Another hurdle for the market? Banks aren’t playing ball. Billy noted that banks are still on the fence when it comes to lending. For buyers or investors looking to jump in, getting a loan isn’t as easy as it used to be. That hesitation from the banks is keeping things sluggish, even as rents drop and some opportunities start to pop up. It’s a bit of a catch-22 – cheaper properties, but harder to get the cash to buy them.

Shifting gears, there’s more happening in Wellington that’s got locals talking. In other news, the drug and driving testing law has passed its final hurdle in Parliament. As we reported earlier, this new legislation means police will soon be able to do random roadside saliva tests to catch drugged drivers. It’s a big step, with supporters saying it’ll make our roads safer, while others worry about fairness and overreach. Either way, by December, you might find yourself at a checkpoint on The Terrace or out by Petone, so best to keep it clean behind the wheel.

On top of that, Wellington had a rough start today with a catastrophic signal failure that stopped all trains into the city. Commuters were left stranded as Metlink scrambled to get buses in place, but the chaos left many fuming. It’s another reminder of how fragile our transport system can be, especially when you’re trying to get to work in the morning. For a city that relies on its trains, it was a messy way to kick off the day.

Back to the property scene, though, and Billy’s insights are a wake-up call for Wellingtonians. The market’s taken a battering, no doubt, but those signs of life he mentioned could be the start of something. Infill developments in places like Lyall Bay might lead the way, offering new homes that better fit what people want – smaller, more manageable spaces rather than the big old villas of yesteryear. For renters, the drop in prices is a rare bit of good news in a city that’s long been tough on the wallet.

Still, there’s a long road ahead. With banks holding back, empty flats piling up, and the loss of students and public servants still biting, Wellington’s property market isn’t out of the woods yet. Landlords are feeling the squeeze, and anyone looking to buy or invest might need to play the waiting game. But if Billy’s right, and those green shoots are starting to show, maybe the capital’s housing scene is in for a slow but steady turnaround.

For now, Wellingtonians can at least take some comfort in those cheaper rents. Whether you’re a student, a worker, or just someone trying to make ends meet, a bit of relief on the rent bill is nothing to sneeze at. As for the future, we’ll keep an eye on those infill projects and see if the market can find its feet again. One thing’s for sure – in this city, there’s always a story to tell.

This is One Network Wellington Live, bringing you the latest from the heart of the capital. Stay tuned for more updates as Wellington’s property market – and the city itself – keeps evolving.

[truth-seeker]