Manawatu/Whanganui house values experience strong growth as Auckland market cools

Manawatu house values are 'rocketing along' with gaining an average of 13.9 per cent extra value in the year before August.
Warwick Smith

Manawatu house values are 'rocketing along' with gaining an average of 13.9 per cent extra value in the year before August.

Houses in Manawatu and Whanganui are continuing to march upward in value as growth in Auckland cools down and the Wellington market stabilises.

Quotable Value rating valuer Jason Hockly said Manawatu house values had continued a steady upward trend, gaining an average of 13.9 per cent extra value in the year to August.

He said the first signs of the typical spring lift in property availability and sales volumes were showing but high demand could quickly soak up newly listed properties.

Horowhenua house values climbed by 20.4 per cent in the year to August.
Jonathan Cameron

Horowhenua house values climbed by 20.4 per cent in the year to August.

"It's rocketing along," he said. "There's been a lot of multiple offers, and people are confident to go to the bank. 

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"You had some massive increases in the Auckland, Waikato and Bay of Plenty regions, [but] those markets have definitely slowed, which is good. For Palmerston North, the increase is a bit more constant and steady over time. We could probably lift another 5 or 10 per cent before the end of the year."  

Within the wider Manawatu/Whanganui area, houses in Horowhenua led the value growth, climbing 20.4 per cent in the year, followed by Rangitikei houses, up 16.2 per cent.

Whanganui homes increased in value by 14.7 per cent, Tararua homes by 13.1 per cent and homes in Palmerston North gained 11.5 per cent in value in the past 12 months.

But nationally, house value growth fell to 4.8 per cent in the past 12 months, the first time in five years it has dipped below 5 per cent, the QV house price index for August showed.  

The national figure was influenced by Auckland housing value growth slowing to 2.8 per cent in the past 12 months, Christchurch "plateauing" at 0.1 per cent growth and Wellington quietening to 12.9 per cent value growth, QV's report said.  

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Elections can dampen markets, but Hockley did not predict much effect on the Manawatu market during September's national elections unless there was a delay in the formation of a  government. 

"Most people are on the page that the interest rate might be a little bit higher in a year or so. I don't see people being too concerned."  

Watson Real Estate business development manager Greg Watson said the dampening effect usually started two months before an election, and ever since MMP was introduced in 1996 it has often gone on for another two months after the election.

Manawatu has not been an exception to that rule until this year.

"We expected it would be the case this year as well, but we haven't really noticed that.

"Maybe because there's not a lot of fundamental differences in housing policy between the  two main parties, so investors and buyers are fairly certain of what's coming."

Another possibility was that tight supply and the steady, large, price rises meant investors and sellers still saw it as good time to act, despite any uncertainty, Watson said. 

Property Brokers Levin and Foxton branch manager Rohan Teaz​ said Horowhenua's boom was being driven by a surge in buyers from outside the region. And not all of them were investors looking to cash in. A significant proportion was people looking to move into the region, he said.

Big infrastructure projects, such as a new bridge at Foxton and the $630 million Kapiti Expressway  had given people faith in the future of Horowhenua, Teaz said.

"Even with the price increases, [Horowhenua] is still one of the cheapest places to buy a house. You can still find a home for under $200,000 if you look hard enough."

Feilding houses and residential sections were continuing to see strong growth, buoyed by high demand and low supply in Palmerston North. 

 - Stuff

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