Palmerston North house prices drop 5.4%
The cooling Palmerston North property market continues on as houses see an average price reduction of 5.4% across the city.
The latest QV house price index shows Palmerston North recording the largest decline among the country’s major centres over the three months ended in April, and for the second month running.
The report attributes this trend to a combination of high interest rates and loan affordability constraints.
QV’s Manawatū property consultant, Olivia Roberts, said it was a trend that looked likely to continue into the foreseeable future.
‘‘I don’t think we are gonna see this stabilise until interest rates stabilise.
‘‘We have seen consecutive rises to the OCR [official cash rate] recently and this is really the result of that.’’
At face value, the prospect of lower prices would mean a favourable market for potential buyers.
However, Roberts said there were other factors that made the property market harder to access for prospective homeowners.
‘‘I don’t see many people winning in this situation. It’s hard for first-home buyers to reach the 20% deposit threshold, property investors are seeing returns diminishing. For developers it’s more of a risk as building costs start to rise.’’
Ray White licensee agent Stu Fleming has worked in Palmerston North’s property market for decades and took a different view on the price decline across the city.
He said the usually stable market had seen an unusual amount of fluctuation.
‘‘I think what we are seeing is a correction to the increase we saw over the past year. We’re coming off the back of people’s properties doubling in value in past years.
‘‘Houses would last 20 days on the market last year, and now it’s an average of 60 days on the market so far this year.’’
He said, although the city was seeing a big decline, it had come off the back of a ‘‘fairly big increase’’.
Palmerston North’s price drop was an increase on the 3.2% decline shown in the last QV house price index report.
It was also almost 2% higher than the next region down, which was a 3.6% decline inWellington.