City-wide boom time continues for sellers

Palmerston North house prices have continued to rise, while the wider Manawatu and Whanganui area is now considered one of the strongest performing property markets in the country.

But a close analysis of the sales data shows there are still houses available at lower prices.

The median house price in the city hit $359,000 in May, according to data from the Real Estate Institute of New Zealand (REINZ). House prices have increased by more than $50,000 in the past year, with May’s median the most expensive since records began in the 1990s.

The median government valuation of the houses sold in May was $277,500, suggesting the city’s market is strongly in favour of sellers.

The Manawatu REINZ spokesman Andy Stewart said the market continued to show ‘‘positive trends’’. There were only 94 sales in the city in March, but that grew to 136 in May. ‘‘However, the shortage of available listings is certainly effecting the volume of sales throughout the Manawatu,’’ Stewart said.

There were about 450 properties on the market 18 months ago, but that had dropped to 230. There were plenty of first-home buyers in the market, with low interest rates helping sales prices along, he said. ‘‘This continues to stimulate the lower end of our market, creating an increase in prices throughout the market.

‘‘These factors have continued to cause a ‘roll-up effect’ in activity, with mid-market vendors selling their first homes and rebuying up at a higher level. The market is now active at all levels.’’

Many properties were attracting multiple offers, meaning high prices and quick sales, while open homes were strongly attended, he said.

Of the 136 sales in Palmerston North in May, 30 per cent were sold for less than $300,000, and 63 per cent for less than $400,000. ‘‘This continues to indicate that, in comparison to other areas around New Zealand, our city still has very affordable homes, although prices are definitely rising,’’ Stewart said.

Across the Manawatu/ Whanganui region, prices rose 19.6 per cent in the past year, with Rangitikei and Ruapehu the biggest movers.

REINZ chief executive Bindi Norwell said the region was one of the strongest in the country, thanks to the number of houses on the market falling by 500 in the past year. Loan-to-value restrictions on investment properties had slowed investors, but any void in demand was being filled by other buyers, she said.

The strong growth in Manawatu/whanganui was mirrored in Northland, Nelson/marlborough and Southland, which all hit record median prices in May. Meanwhile, growth in Auckland and the country as a whole had slowed.

‘‘We are seeing a continuing trend of strong median house-price growth in many of the regions year-on-year, however, a lack of inventory continues,’’ Norwell said.