Higher rents make own­er­ship at­trac­tive

The Hutt News - - FRONT PAGE - SU­SAN ED­MUNDS

Some first-home buy­ers are en­ter­ing the prop­erty mar­ket be­cause it’s al­most as af­ford­able to own as it is to rent in some parts of the coun­try, Quotable Value says.

QV gen­eral man­ager David Nagel said first-home buyer ac­tiv­ity was in­creas­ing in Welling­ton, with peo­ple tak­ing ad­van­tage of the abil­ity to use their Ki­wiSaver funds as a de­posit.

‘‘The higher pro­por­tion of first-home buyer ac­tiv­ity is largely due to ris­ing rents, which mean it can of­ten be as af­ford­able to pur­chase an en­try- level home and pay a mort­gage, as it is to rent a home.

‘‘How­ever, for many, rais­ing a de­posit is still a bridge too far to cross to be able to gain en­try into the hous­ing mar­ket.’’

In Welling­ton, the av­er­age QV value of $642,156 would cost $1385 a fort­night on a 25-year mort­gage at 5 per cent in­ter­est, with a 20 per cent de­posit.

Trade Me said the me­dian weekly ask­ing rent in Welling­ton was $485 in March.

Welling­ton se­nior consultant David Corn­ford said it was still a sell­ers’ mar­ket in the cap­i­tal. Pe­tone’s new town­house de­vel­op­ment, Pae­tutu, al­most sold out in a week, he said. Based on an 80 per cent mort­gage on the av­er­ageQV house value, and TradeMe me­dian rent. Per fort­night: Napier: Rent: $800 Own: $1214 Hamil­ton: Rent: $790 Own: $1196 Whangarei: Rent: $800 Own: $1105 Nel­son: Rent: $840 Own:$1214

‘‘These off-the-plan prop­er­ties sold be­fore the of­fi­cial mar­ket­ing launch and be­fore for­mal mar­ket­ing com­menced, with most of the buy­ers learn­ing of the de­vel­op­ment through The Pro­fes­sion­als mail­ing list.

‘‘The town­houses are priced in the mid-$500,000s and it high­lights the strong de­mand for af­ford­able hous­ing in Welling­ton. We un­der­stand the ma­jor­ity were sold to owner oc­cu­piers.

‘‘First-home buy­ers are mo­ti­vated to pur­chase, with both ris­ing rental costs and ac­cess to their Ki­wiSaver funds for de­posits. We con­tinue to see strong de­mand in this seg­ment of the mar­ket.’’

He said the ‘‘stu­dent surge’’ into Welling­ton had set­tled, but the rental mar­ket re­mained tight and there had been a sig­nif­i­cant up­lift in rent lev­els over the last 12 months, par­tic­u­larly in Lower Hutt.

Year-on-year, QV’s House Price In­dex is up 7.6 per cent.

Auck­land’s prices were up just 0.8 per cent com­pared to last year’s. Napier had the fastest an­nual rate of price growth, up 17.6 per cent in the year to April.

That was fol­lowed by Hast­ings and In­ver­cargill.

Nagel said peo­ple were look­ing for a dif­fer­ent life­style in smaller ar­eas, which boosted their prices.

‘‘Par­tic­u­larly those that are within com­mutable dis­tances of ma­jor cen­tres.

‘‘Val­ues across the Auck­land Re­gion and Welling­ton City have dropped over the past quar­ter.’’

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.