Buyers flock to snap up homes
Home buyers in Manawatu are snatching up properties at the middle and lower end of the market as housing becomes more affordable.
It is easier to buy a house in Manawatu than almost anywhere else in the country, with the region the second most affordable place to purchase property.
Buyers are flocking to lower-value houses, which agents say has caused a shortage.
The latest Massey University Home Affordability Report, released yesterday, shows affordability across the country improved by 2.8 per cent in the last quarter.
But it is Manawatu/Whanganui that is moving the fastest, with the area having a 9.4 per cent improvement in affordability.
Overall, Manawatu/Whanganui sits just behind Southland as the most affordable place to buy.
Massey University real estate expert Professor Bob Hargreaves said wages, house prices and interest rates were used to figure out affordability.
Wages had gone up by about $6.25 a week on average nationally, while monthly mortgage repayment costs were dropping.
Prof Hargreaves said the wage-to-house price ratio definitely helped people buying in Manawatu.
"Affordability in a region like Central Otago Lakes [the most unaffordable area in the country] is bad because there are a lot of young people in the service industry there."
Real Estate Institute of New Zealand figures show 71 per cent per cent of properties sold in Palmerston North last month went for under $340,000, with the median listing price sitting at $270,000.
And Quotable Value statistics show the average sale price in Palmerston North in the last quarter was $288,809.
Prof Hargreaves said it showed more about the kind of people buying than the properties on the market.
"More first-home buyers are in the market, and people buying to rent are maybe coming back."
Professionals agent Andy Stewart, who is also the REINZ spokesman for Manawatu, said people were flocking to properties at the lower end of the market in both Palmerston North and the surrounding areas.
"People are coming from other areas and buying rental properties for their kids going to Massey and are saying they couldn't even get a hovel in Wellington at those prices.
"They're looking at those $250,000 to $350,000 houses, and there's some real value.
"People will take their time to buy.
"They are aware and making offers a bit lower than sellers are asking for."
Due to the demand, there was a shortage of lower-priced houses, Mr Stewart said.
"There's just not enough listings."
This had contributed to lower volumes of sales, but the ones really suffering were those with properties above $400,000 trying to sell, he said.
The only way they were likely to see a big jump in sales was if people in Auckland or Wellington sold up and moved here.