CoreLogic’s most recent property report indicates that housing affordability is improving nationally, but local insight suggests sellers are still sitting tight in the wake of a turbulent market.
With interest rates remaining high, the report estimated that nationally, 49 per cent of the average household income is required to service an 80 per cent loan to value ratio mortgage [based on the average property value, over a 25-year term].
Bang on the national average, the report said that [according to quarter two data] South Wairarapa homeowners are servicing a mortgage with 49 per cent of their income.
The average Masterton homeowner, meanwhile, is allocating 38 per cent of their household income to the mortgage, and the average Carterton homeowner slightly more, at 43 per cent.
Property Brokers regional director John Arends said with interest rates remaining at higher levels than in previous years – and, in some cases, still rising – both owners and first-time buyers remain in a tricky spot.
“Quite a lot of people have come off fixed rates and going on to floating or new fixed rates, which can be over four per cent more,” Arends said.
“For buyers, it is all about affordability. If you’re looking at the total package, the interest rate component is affecting the house value component of the purchase.”
The report said average house values in Masterton are at $553,434, with Carterton significantly higher at $630,469, and South Wairarapa values even higher at $796,463.
Given the region’s market has fewer listings than listings usual, Arends believes many sellers are waiting to see what the election outcome is. “Political uncertainty is a factor, currently,” Arends said.
“People are sitting on their hands because they’re not sure what government we’re going to have and whether it’s going to be more beneficial to wait for your property transaction.”
As Wairarapa’s market is susceptible to Wellington trends, Arends said ongoing sluggishness in the housing sector over the hill is also having an impact.
“There’s not a lot of new building going on compared to a few years ago. Building costs are higher than ever before, and along with higher interest rates they are conspiring to make people sit on their hands.”
Despite the lack of listings, Arends said he is still observing healthy buyer numbers locally.
“We have had a few multi-offers over the past month, which shows buyers are there, fighting over the properties that come along.”
