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First home buyers like region’s prices

When the time comes to buy your first house, Wairarapa might be a good place to start.

Current house prices in the region are encouraging plenty of people from Wellington to have a look at a more affordable market. However, while Wairarapa might be an attractive market now, that could soon change.

Proposed new banking rules from the Reserve Bank could produce a more difficult path for first-home buyers.

The Reserve Bank is considering introducing debt-to-income restrictions [DTI]. Open for public consultation, these restrictions would mean the debt on a house must not be more than one-sixth of annual income. The current average asking price for a house in Masterton is about $704,275, minus a 20 per cent deposit, leaving a debt of 563,420. If new debt restrictions were imposed, a buyer would need to earn about $93,000 a year to service the debt. According to Infometrics data, Masterton’s average income was $60,341 last year.

However, local market observers are confident the region is a good place for first-home buyers. Mortgage advisor for Mike Pero Wairarapa Donald Stevenson said Wairarapa is definitely worth a look.

“The area has excellent affordability as far as housing prices are concerned,” he said.

“I see properties in the $400,000-500,000 range, which represents excellent value. Generally, you need two incomes; however, one high income might work.”

A bank usually needs a 20 per cent deposit to grant a loan.

People who have started their KiwiSaver early might have a nest egg of cash, but for others, there are some options.

“Some people are eligible for a first home grant from Kāinga Ora,” Stevenson said.

“You could also have a guarantor to help with your down payment.”

Bayleys Wairarapa real estate agent Danni Carrig is also of the view that Wairarapa is the right time and the right place.

“The region is a good place to be looking at the moment. Many people are coming from Wellington because the prices are more attainable.”

Carrig said it pays to look around.

“Search out what you need in terms of the number of bedrooms, whether you have pets and driving distance to work,” she said.

“Considering these things, it is also important to be realistic and know that your first home is just a stepping stone.”

The Times-Age recently analysed median sale prices during the last 12 months. Data showed that places such as Eketāhuna and Masterton were more affordable.

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