The quarterly economic monitor by Infometrics, commissioned by Wellington City Council, shows economic growth in Wellington of 2.6 per cent over the year to June 2015, up from 1.7 per cent growth last year. This was slightly behind the national increase of 3.1 per cent.
Wellington has effectively been growing year on year since 2011.
This good performance spans retail, house sales and accommodation. However, the report reveals the city lags the national average in sectors such as house prices, GDP, vehicle registrations and residential consents.
Data from Marketview on electronic spend in the city shows the value of retail sales in Wellington City to June 2015 was up 3.5 per cent.
Spending on larger ticket items such as cars and commercial vehicles continued to grow.
However sales volumes are expected to taper off as the weaker dollar puts upward pressure on vehicle prices.
According to First Retail Group MD, Chris Wilkinson, there is confidence in the retail sector as manifest in new developments and retailers taking on bigger premises. “Wellington has become an aspirational destination for retailers following David Jones’ announcement of major investment,” he says. “This move sits alongside TopShop’s imminent arrival and many new stores opening along the Capital’s Golden Mile of shopping.”
House sales climbed 11 per cent over the quarter and house prices lifted by two per cent.
Nationally, house prices rose by 9.3 per cent.
Increasing business activity in Wellington, coupled with downward pressure on domestic airfares, is pushing up domestic travel to Wellington, the report says.
Guest nights in Wellington were up 7.3 per cent over the June year, well above the 5.3 per cent growth seen nationally. Some much publicised events such as the Cricket World Cup and Anzac centenary commemorations and exhibitions increased visitors to the city, with concomitant increased retail spend.
International guest nights are also climbing and, with the lower New Zealand dollar pushing up foreign visitors’ purchasing power, the growth looks set to continue.
The weaker dollar may also encourage more international students to study in Wellington according to the report.
According to Colliers International, trans-Tasman interest in Wellington’s retail sector is leading to a major shift in perspective. The overall 8.3 per cent vacancy rate has decreased from 9.8 per cent recorded 12 months ago. David Jones’ acquisition of Kirkcaldie and Stains along with Melbourne’s Seed Heritage lease has generated significant momentum in Wellington’s retail sector. Interest from local and offshore retailers has risen dramatically. Office and student developments on the horizon will boost pedestrian counts further, and rejuvenate much needed areas of the city
