Property market gap widens

SLIGHT GAIN: The average house sale price in Wairarapa rose by 0.7 per cent between April and July.

Tepid growth in Wairarapa's residential property market sits in marked contrast to the soaring Auckland market, reflecting the widening gap between the big smoke and provincial New Zealand.

The latest New Zealand Herald Property Report, released last week, shows the average house sale price in Wellington region, which includes Wairarapa, rose by 0.7 per cent between April and July to $445,899, while Auckland region prices jumped 4.1 per cent to $644,973.

Bayleys Masterton owner Mark Morison said Wairarapa monthly sales had been "very consistent" for the last 12 months, with a recent rise in multi-offer situations.

There was demand for properties in the first-home buyer price range coupled with a shortage of stock, which could drive prices up.

The cheapest area to buy a house in Wairarapa for the quarter ending June 30 was Featherston, with a median house price of $156,000, while the most expensive area was Martinborough with $376,000.

Featherston was attracting buyers from the Hutt Valley, said Mr Morison.

"It's got good potential for taking off, it's an option to own property that they might not have in Hutt Valley."

A planned new supermarket and shopping complex, due to open next year, would change the town's dynamics substantially, he said.

"There is potential there. It's been cheap for so long, at some point its just got to go."

Martinborough's upmarket housing was attracting retirees and Wellington commuting workers, he said. "It's a nice villagey atmosphere, it's a pleasant place to live, it's a nicer climate."

The average asking price for Wairarapa dropped 0.3 per cent during August to $270,717, according to realestate.co.nz.

Real Estate Institute of New Zealand chief executive Helen O'Sullivan said the regional markets were starting to reflect some of Auckland and Christchurch's rising prices, but not to the same degree.

"Some areas, in particular the regional areas, are still some distance away from that level of activity and in fact away from their 2007 peak.

"The housing market outside of Auckland and Christchurch is ticking along and doing okay, but I wouldn't call any of the markets outside of those two areas overheated."

Imminent Reserve Bank lending restrictions, which will limit lending on home loan deposits less than 20 per cent, should not have been applied nationwide, she said.

"It's creating, potentially, a barrier for people outside [Auckland and Christchurch] and, based on the state of the market, probably isn't really necessary."

The report showed the most expensive suburbs were all in Auckland, with average prices between $1.2 million and $1.7 million for a property on the city fringe. APNZ