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Bayleys Research


WAIRARAPA RESIDENTIAL REPORT 2008

APRIL 2008

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MARKET OVERVIEW

The rural district of Wairarapa, located in the south east corner of the North Island includes the townships of Featherston, Martinborough, Greytown, Carterton and Masterton, along with coastal hotspots such as Castlepoint, Riversdale and Palliser/Ngawi/Tora. The district, renowned for its rural sophistication, offers a wealth of activities for all tastes ranging from wine tasting, gourmet food, arts and culture to jet boating, rafting and abseiling for the more adventurous type. It is home to 38,613 residents, an increase of 1.1% over the 5 years preceding the 2006 Census data released by Statistics New Zealand (StatsNZ).

The Wairarapa residential property market has experienced strong demand for housing over the past 5 years resulting in substantial growth in the median sale price. As shown in the table below the median sale price of residential dwellings in the region went from $119,500 in the December 2002 quarter to $259,000 in the December 2007 quarter according to the latest statistics released by the Real Estate Institute of New Zealand (REINZ). The Wairarapa region has outperformed the national market in both the short and the long term. The 117% value growth since December 2002 is 37% above the overall New Zealand growth whilst over the last 12 months the 14% increase in Wairarapa’s median has been 10% above the national growth.

 

 

There is an overall weakening of the New Zealand residential sales volume which is not surprising given the high interest rate environment that is currently prevalent. In keeping with national trend, the Wairarapa region, whilst having remained steady over the past 5 years, began trending downwards from the June 2007 quarter into the December 2007 quarter to sit at 237 transactions. This is 23% lower than the December 2006 quarter, however, it is not the lowest sales volume on record which occurred in the September 2004 quarter at 207 transactions.

Another key indicator of market activity is the average days on market figure which has been relatively stable until the March 2007 quarter where it dropped off to 41 days. Subsequently, as the rate of value growth eased through mid 2007, purchasers began taking more time over purchasing decisions as represented by a continued rise in the length of time to sell a property with the days on market reaching a historical high in December 2007 of 87 days, an increase of 81% on the December 2006 days on market.

The easing values, the lower volumes and longer days on the market are possibly an insight into the 2008 market conditions where we will see values flatten and possibly drop in some areas. Anecdotal evidence from the market so far this year suggests that a number of vendors are dropping their asking prices in order to achieve sales.

 

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