Nearly $50k price drop in Palmerston North average price gives buyers breathing room
First-time buyers and homeowners looking for an upgrade are back in the Palmerston North property game as rising house prices ease.
The city's median house price fell back to $336,000 in September – $49,000 less than August's record high and only 1.8 per cent higher than September last year.
Real Estate Institute of New Zealand chief executive Bindi Norwell said this would be welcome news for first-time buyers and anyone struggling to save for a new house.
"Reflecting this change, we've seen approximately 10 per cent more first-time buyers active in the market than this time last year."
* Property market slowdown yet to reach Palmerston North
* Palmerston North homes less affordable than ever as prices hit a two decade-record
* Buyers struggle to find a house in Palmerston North
* Housing market on hold until after election: QV
Manawatū/Whanganui's median house price of $271,000 in September was up 8.4 per cent on a year ago, but was $14,000 less than in August this year.
At the same time, there was a 30 per cent drop in the number of investors competing with them after new rules were brought in about deposits for investment properties, Norwell said.
Property Brokers agent David Klue said investors stepping back had created an opportunity for first-time buyers to get back in the game.
"Investors buy houses for a living. They're in a much stronger position to just jump in.
"First-time buyers have a lot of conditions to satisfy with KiwiSaver, builders, the banks... They usually have to put in an offer for six to seven properties before finally getting one."
Klue said there was still a critical shortage of houses listed for sale, so competition remained fierce in most brackets.
But, listing numbers seemed to be improving. More property owners felt comfortable taking the risk to upgrade to a better house.
For the first time in 18 months, there were plenty of offers coming in that were conditional on the sale of the buyer's previous home, Klue said.
Palmerston North couple Lance and Joanna Retemeyer were among buyers who took advantage of the favourable conditions last month to make a change.
Lance Retemeyer said the couple fell in love with a Windsor St house, but it was in the $600,000-plus price bracket.
Retemeyer said they did the math and realised if they sold their mid-priced Brightwater Tce home in this market, they could afford to buy it with a slight financial stretch.
"But we were very surprised and happy with the interest in it, how quickly it went, and how good a price we got."