Housing price war favours rail town

TOP SPOT: Featherston appears to be popular with buyers from Upper Hutt. PHOTO/FILE

Featherston is proving a hit with Upper Hutt buyers looking to get into their first home, a Masterton real estate agent says.

The latest QV New Zealand Herald Property Report shows Featherston was the region's cheapest area to buy a house for the quarter ending March 31 with a median house price of $198,500. The most expensive area was Martinborough at $290,000.

The average house sale price across the Wellington region rose 0.6 per cent in the three months to April to $455,214.

Additional QV figures released last week show Masterton's average property values dropped 2 per cent over the past 12 months to $234,630.

In contrast Carterton values rose 3.7 per cent to $260,273 and South Wairarapa rose 2.9 per cent to $298,036.

Wairarapa values remain well below their 2007 peak.

Nationwide, property values jumped 8.2 per cent over 12 months to $471,791, and are up 13.9 per cent on the 2007 peak.

Professionals Patrick & Scott Wairarapa principal agent Andy Scott said Featherston had become popular with first home buyers from Upper Hutt, due to its easy access by train.

"The perception from Wairarapa is that it's not the place to be, but I think people from Upper Hutt don't mind being there at all."

The QV median price would buy a well-built old villa, he said.

In Martinborough, more wealthy "weekenders" from Wellington were buying properties.

The style and quality of Martinborough homes was similar to Featherston but "you're probably $50,000 to $60,000 better off in Featherston", he said.

According to the report, the country's most expensive suburbs were mostly in Auckland, with average prices ranging between $600,000 and $1.5 million for a property on the city-centre fringe.

Affordable housing is shaping up to be a key election issue as political parties compete over ways to increase housing stock.

The Government is freeing up land for development under its Auckland Housing Accord and also lifted some tariffs on building materials in this year's Budget.

Labour has vowed to build 10,000 new homes a year for a decade under its KiwiBuild plan and proposes compulsory KiwiSaver and tighter immigration policies.

Last month Labour leader David Cunliffe accused Prime Minister John Key of being "in denial" about a housing crisis after the OECD's latest Economic Outlook report said New Zealand house prices were among the most overvalued in the developed world.

Meanwhile, thousands of young couples and families are struggling to get into their first home amid rising interest rates and lending restrictions on low deposit mortgages.

Political commentator and Otago University lecturer Dr Bryce Edwards said the home affordability debate favoured opposition parties over a government perceived by some to be doing nothing about it.

In contrast to soaring Auckland prices, most regional values remain well down on their 2007-08 market peak - sparking claims provincial New Zealand has been unfairly targeted by the Reserve Bank's lending restrictions. -APNZ

Wairarapa median price Jan-Mar
-Most expensive area: Martinborough $290,000
-Cheapest area: Featherston $198,500
-Wellington $455,214 (Q2 2014) $452,427 (Q1 2014)