Interest rates 'handbrake'

The cheapest area to buy a house in Wairarapa for the quarter ending November 30 was Featherston and the most expensive area was Greytown.

Wairarapa home buyers are showing caution when deciding on properties instead of making rushed decisions, a Masterton mortgage broker says.

According to the latest QV New Zealand Herald Property Report, the cheapest area to buy a house across the Wairarapa for the quarter ending November 30 was Featherston, with a median house price of $168,500. The most expensive area was Greytown at $303,000.

The country's most expensive suburbs were all in Auckland, with average prices ranging between $1.2 million and $2 million for a property on the city centre fringe.

The average house sale price in Wellington region rose by 1.4 per cent in the three months to December to $452,427, the report shows.

And though the nation's property prices has been steadily climbing, a likely 0.25 per cent rise in interest rates today is expected to lump more costs on mortgage holders and could slow the heated housing market, experts warn.

Wairarapa Home Loans consultant Matthew Spicer said the recent Reserve Bank lending restrictions for borrowers with a deposit less than 20 per cent had put "a little bit of a dent" in the first home buyer sector.

On the flipside, more investors had come back into the market looking for value-for-money properties, he said.

"But overall people are just being a bit more cautious and they're not rushing into things."

In Featherston, buyers could expect to find a reasonable, solid three-bedroom home for the town's median price that might need "a bit of TLC".

"Something that you could still spend money on and add value to."

In Greytown, the extra money would get buyers more "bang for buck", such as a three-bedroom home with a garage that offered "a nice stroll into the village".

"We still think we've got a pretty special place here and that's why we're attractive to more Wellington people than anything else.

"Compare what you can buy over there to over here - not only do you get a house but in a lot of cases you get a decent sized back yard."

The forecast rising interest rates would have an impact on the Wairarapa market, but there were still many reasonably-priced houses around, he said.

Meanwhile, new monthly figures from the Real Estate Institute of New Zealand show the median house price for Wellington region increased 11.6 per cent during February to $418,625 - up 3.4 per cent from the same month last year. The number of sales jumped 57 per cent to 688 last month - but recorded a 9.8 per cent year-on-year fall.

Wairarapa-specific figures were unavailable.APNZ