Palmerston North house market tight

JONO GALUSZKA
Last updated 08:00 10/11/2012

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Property sales are continuing to steam along in Palmerston North, but a lack of listings and few high-priced house sales is keeping things tighter than the national market.

Real Estate Institute of New Zealand statistics released yesterday show sales in Palmerston North went from 97 in October 2011 to 108 last month - an increase of 11.3 per cent.

The average sales price jumped 5.3 per cent from $270,000 to $284,250, which was well above last month's median listing price of $259,000.

But while sale prices were up, inventory was lowering.

At the end of last month there were 314 properties being advertised in Palmerston North, a number Professionals agent Andy Stewart said was "a bit low".

"If you went back a year ago you had about 450 or 500 [on the market]," Mr Stewart said.

Fewer houses on the market meant fewer houses were selling.

"The reason the market is tight here is because there's not the property out there, and the number of sales are reflective of what's going on."

Nationally, sales were up 32.6 per cent on last October to 6640, with the national median price hitting a record of $380,000.

REINZ chief executive Helen O'Sullivan said the national market was split in half.

"The market is very much in two parts - the metropolitan regions of Auckland, Wellington and Christchurch, where prices are rising, and the rest of the country, where price trends are mixed," she said.

Palmerston North houses under $350,000 were still making up the bulk of sales at the moment, keeping the average price down, she said.

About a third of all houses sold in the city last month went for above $360,000.

That was against the national trend, with about half of the properties sold last month going for above $400,000.

Mr Stewart said the lack of more expensive property moving was possibly down to people not wanting to move up the property ladder.

"It's not the numbers we had a few years ago, but anything is an improvement."

While sales and prices were rising, the most encouraging part was the fall in number of days to sell, he said.

In October last year it took about 30 days to sell a house, but it only took 23 days last month.

Mr Stewart said it was all down to the quality of properties.

"If you list a great property and have an open home, you can almost guarantee - from that open home and existing buyers - you will have a multiple-offer situation in the first week or 10 days."

JVL Prestige principal John van Lienen said it was positive to see the market ramping up towards Christmas, especially after a patchy winter.

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While the lower and middle ends of the market were busy, it would have to change soon, he said.

"Some people have got to move up, and we're seeing a lot of activity there," Mr van Lienen said.

"I'm keen to see what transpires around the upper end of the market in mid-February."

Despite interest rates being low and the possibility of them dropping even lower - some economists have called for a cut in the official cash rate in response to worsening unemployment data reported this week - Mr van Lienen said people were not going crazy on the market.

"They're usually paying the market price, sometimes a bit more or lower in some cases."

- Manawatu Standard

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