The two “hot spots” boast affordable housing and better transport
With the COVID-19 pandemic impacting the property market and buyers' interest, Quotable Value (QV) has looked into the changes in Wellington's residential property market, including the next “hot spots” for first-home buyers.
QV area manager Paul McCorry identified Ōtaki and Featherston as two of the region's next “hot spots” for first-home buyers and property investors.
“For the most part, first-home buyers, and investors have already been priced out of Wellington city either by the high access costs or because of the very low yield relative to the investment cost to an investor,” McCorry said.
“Until now, this has made the Hutt Valley a hot spot for young families and speculators alike. But where once you could get a home on a half-acre section for under the national average, now sales prices are often well over $1m.”
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McCorry said first-home buyers and other investors flock towards Ōtaki due to its lower base price and improved transport connections to Wellington city.
“We're already starting to see a northward migration as first-home buyers seek entry-level prices and investors chase more value for their money up the coast,” he said.
“For investors, there is a relatively low-cost access, reasonable yield, and currently only three properties available to rent in Ōtaki at the time of writing, meaning that if you listed a quality property for rent, it would likely be snapped up overnight.”
Meanwhile, Featherston, along with the whole district of South Wairarapa, boasts regular train services to the capital and relatively affordable housing for first-home buyers and young families. The area will have its next rating revaluation in early 2021.
However, McCorry warned that New Zealand's heated property market and the Reserve Bank of New Zealand (RBNZ)'s plans to reinstate loan-to-value ratio (LVR) restrictions might impact the affordability of properties in Ōtaki and Featherston.
“Guessing what will happen after the Christmas break is fraught with challenges. There remains a great deal of uncertainty in the market right now. I'll continue to watch the market with interest, and I'm sure that all first-home buyers and property investors will be doing the same,” McCorry said.
