Monitoring Wairarapa housing data
Planalytics are big fans of using data to inform decision-making. We have been collecting Wairarapa housing data from various sources since 2018. This allows us to present trend analysis to aid understanding of the housing market within our local communities of Masterton, Carterton, and South Wairarapa. In this journal article we explore Wairarapa housing data as at 30 June 2022 using the dashboard below. We hope this is useful to people and organisations currently in, about to enter, or otherwise working alongside the local housing market.
So what is the data telling us?
The number of new building consents in the first half of the calendar year dropped slightly across Wairarapa. Of the three territorial authorities, only Masterton bucked the trend with a slight increase in new building consents. This tells us that the number of new buildings likely to be constructed (and therefore become available to occupy) is decreasing, although the time period of six months is not long enough to identify a specific downward trend.
According to Tenancy Services rental bond data, the highest median weekly rent for Carterton and Masterton was seen in April with rents of $570 and $495 per week respectively. The figures for both fell over May and June, by 14% and 11%, suggesting a market correction. In South Wairarapa a different trend is apparent, with the highest median weekly rent of $580 peaking in May and no significant drop in June.
South Wairarapa also had the highest median house price of homes sold in the six month period from January to June. Again the peak was seen in May with the median house price hitting $1.3 million. Masterton’s February figure was a record median house price for that district at $740,000.
It should be noted that only a small number of houses are typically sold in Carterton and South Wairarapa each month (approximately 11 or 12) and therefore no significant trends can be observed for these areas. With such a small sample, ‘outlier’ sales can disproportionately affect the average house price.
Across Wairarapa, over 300 houses were sold in the first six months of the year. Almost a quarter (24%) were sold in March with a fifth (20%) sold in April. This demonstrates an active market in the autumn months.
Is housing affordable in Wairarapa?
We hear a lot in the media about housing affordability. In order to understand what this looks like for Wairarapa we have included affordability metrics, such as the number of years it could take to save a 20% deposit, in the Planalytics Wairarapa housing dashboard.
A recent housing affordability report by Corelogic noted that South Wairarapa had the highest average household income of our three districts but also ranked highest on each affordability metric. This indicated that South Wairarapa was the most expensive place to buy or rent a house for the first six months of this year. For example:
House prices in South Wairarapa were 8.4 times the average household income of $108,287. In comparison, Masterton house prices were 7.4 times and Carterton’s were 7.8 times the average household income in those areas.
It would take just over 11 years to save a 20% deposit in South Wairarapa. This represented approximately $331,760 in rent payments, based on the median rent of $580/week for 11 years (assuming a potential home buyer had to rent while saving to purchase a home).
For renters, the proportion of household income required to pay rent was 22% in South Wairarapa while for home owners, it took 39% of household income to service a mortgage. The same figures were observed for Carterton. While this may sound bleak, at the national level, the percentage of average household income required to service a mortgage reached a record 53% in the second quarter of this year (up from 50% in the first three months of the year).
Housing affordability is also gauged by statistics regarding demand for public housing. Since 2020, the number of applicants on the Ministry of Social Development’s housing register has increased slightly for Carterton and South Wairarapa with an average of 18 and 25 applicants per month. Masterton has seen a 48% rise in applicant numbers from the first quarter 2020 to the first quarter of this year.
Public housing tenancies (homes) have also increased over the same period for all districts with the Ministry for Housing and Urban Development’s Public Housing Regional Factsheet reporting 217 occupied public houses for Masterton, 19 for South Wairarapa and 17 for Carterton as at June this year. This means that both demand for, and supply of, public housing is increasing in our region, but not in tandem. There is still a supply lag that means people requiring public housing exceeds the number of public houses available.
What does this mean for me?
Tiff outside her place in South Wairarapa.
Love it or hate it, the local housing market impacts all of us in some way. Whether we own or rent our home, the availability and affordability of housing in Wairarapa influences our disposable income, our financial security, and whether our local schools and healthcare facilities can attract and retain staff to teach our children and meet our health needs. These are but a few examples.
It is therefore incredibly beneficial to monitor local housing data and we hope the Planalytics dashboard provides a useful tool for understanding market conditions. Please do not hesitate to contact us at office@planalytics.co.nz if you have any additional observations or need for data visualisation. We are as local as you are.