House prices hit a record high in city

A shortage of houses for sale in Palmerston North is continuing to push up prices.

Some property buyers are looking instead at Manawatu¯ and Horowhenua towns.

Houses in the city are worth 4 per cent more than they were three months ago, according to Quotable Value.

The average house is valued at $406,777 – a new high.

Annual growth rates remain strong in regional centres, including Rangitı¯kei and Tararua.

Real Estate Institute of New Zealand Manawatu¯ spokesman Andy Stewart said it was a seller’s market in the region.

‘‘There’s such a shortage of property, prices are definitely pushing up,’’ he said. ‘‘It’s all supply and demand.’’

He said because of the property shortage in Palmerston North, people were going further afield to places such as Feilding, Marton, Bulls, Foxton and Himatangi.

Stewart said there were about 170 houses for sale in Palmerston North and 23 to 28 in Feilding.

The annual growth in values in Palmerston North had climbed above 10 per cent, more than twice the national growth rate.

Stewart said the housing market in big cities had cooled off.

But, in Manawatu¯ it was a great time to sell and nothing was going to change drastically in the next year.

First-home-buyer activity is relatively high in places such as Porirua, Upper Hutt and Dunedin, as well as other smaller regional towns.

The nationwide average value is now $676,427.

Quotable Value general manager David Nagel said interest rates were expected to remain low well into 2020.

There were unlikely to be dramatic changes to values outside of usual seasonal fluctuations.

‘‘The continued slowdown in the rate of value growth in our main centres continues to have a ‘trickle-down’ effect on our regional centres.

‘‘Many smaller provincial areas are experiencing a gradual slowdown in growth.’’