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House prices ‘going south’


Southern district fetching better house prices

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Wairarapa’s three districts paint an interesting picture of the Wellington regional housing market, with prices and sales volume inconsistent across the valley.

New September data from the Real Estate Institute of New Zealand [Reinz] has shown that the number of residential properties sold across New Zealand increased by 37.1 per cent from the same time last year [from 6112 to 8377].

This was the highest number of properties sold in a month for almost four years – the last sales record was in March 2017.

Several sale price records were broken in the Wellington region, but none in Wairarapa.

The average median price in Kapiti, Upper Hutt, Lower Hutt, and Wellington City increased by 4.4 per cent – taking all four areas to the highest median sale price ever recorded.

But in Wairarapa, no price records were broken.

In Masterton and Carterton, the average sale price for September was down on the figure for August.

Masterton’s average price fell from $470,000 in August to $451,000 in September, with negligible change in volume sold [51 for August, 52 for September].

Carterton’s average price fell from $480,000 in August, to $464,000 in September, again with a negligible change in sales volume [19 for August, 18 for September].

South Wairarapa was a different story, though. September’s average price was up on the month of August, by almost $100,000.

It jumped from $560,000 to $653,000 in just 30 days, but volume sold was down to 20 in September from 25 in August, a big slump of 20 per cent.

However, month-to-month average sale prices aren’t always a good indicator of the market. One very expensive property can “spike the average”, one estate agent said, particularly with relatively low sales volumes.

For September 2019, the average sale price in South Wairarapa was $490,000, which shows the longer-term trend in price increase.

The fact that South Wairarapa was the only region to go up in average price compared with August, despite relatively consistent sales volumes across the region, could point to the district’s growing popularity relative to the other two.

Mark Coffey, regional director at REINZ, said that this was likely triggered by an ongoing urban exodus from Wellington.

“Demand for good properties is spreading further from Wellington city, with people increasingly looking to the surrounding districts and cities as a result of covid-19, and the new opportunities of working from home.”

While property in Masterton and Carterton was cheaper than South Wairarapa, the length of the commute and the proximity to the city was still thought to be a big factor.

The extra 45 minutes to Masterton, compared with Featherston, either by car or train, was thought to be a motivation for Wellington people to opt for South Wairarapa, in preference of the other districts, not to mention the district’s natural beauty and high number of existing Wellington commuters.

Ticket prices also vary quite a bit from Masterton to Featherston. Metlink’s popular 10-trip ticket, which allows commuters the equivalent of a return journey five days a week, costs $148.30 from Masterton [zone 14] and $117.40 from Featherston [zone 11].

Relative house price, proximity to the capital, and commute time and price seem to be an ongoing booster for the South Wairarapa district, which is seeing about 90 per cent of new housing sales go to former Wellington residents.

Erin Nesdale, an experienced real estate agent based in South Wairarapa, said about nine in 10 houses were going to people leaving the capital.

“It’s been up in the 90 per cent range in the south for a long time. Mostly this is going to Wellingtonians, but we have a new mix coming in of returning expats – quite a few more of them in the last month or so.

But sales are still predominantly from Wellington-based people.”

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