Town shrugs off its zombie tag
Whanganui has thrown off past stigma to become a property hotspot and one of the country’s most affordable housing markets, finds Miriam Bell.
In 2014, economist Shamubeel Eaqub described Whanganui as a ‘‘zombie town’’ because of its (then) limited economic and population growth. At the time, the city’s property market was flat.
That has now changed. Whanganui is undergoing a resurgence and its population has been growing. The most recent Stats NZ population estimates put it at 47,300, which surpasses its previous peak in 1997.
In tandem with the city’s broader growth, momentum in Whanganui’s property market has picked up significantly. There was annual value growth of 31.8 per cent in the year to April, according to CoreLogic.
That growth took the city’s average value to $484,812 in April. Additionally, of the top 10 suburbs nationally to see the biggest jump in annual values, two (Durie Hill and Aramoho) were in Whanganui.
A new CoreLogic report also shows that in the first quarter of this year, 100 per cent of the city’s resales were above the original purchase price, with a median resale profit of $300,000.
CoreLogic chief property economist Kelvin Davidson says areas, like Whanganui, which have had the highest price growth
in recent times started from lower, more affordable bases. ‘‘That made them attractive targets and has pushed up prices for all buyers.’’
The Real Estate Institute’s April data provides additional evidence of the Whanganui market’s strength. It has the median price at $470,000, up by 37.4 per cent from $342,000 in April last year. It also points to a supply shortage: the broader Manawatu¯ / Whanganui region has one of the lowest levels of inventory in the country, at five weeks’ worth of property for sale. That has been putting pressure on prices.
Property Brokers Whanganui branch manager Ritesh Verma says a shortage of housing in the town has been one of the contributing factors to the market’s boom over the past year.
The city and its central location, relaxed lifestyle and affordable house prices had also long been underrated, he says.
‘‘Now, people are moving here, or returning from living elsewhere. It’s been helping to drive the market.’’
For the six to eight months
before the Government’s housing policy announcement in March, his firm was seeing 30 to 40 people at every open home, which was unprecedented. Multi-offers on properties were the norm.
But since the announcement, the fizz had come out of the market a bit, he said. ‘‘We are probably seeing about 10 to 20 people at open homes in certain price brackets now and in some price brackets there might be only five. And sales volumes have come back a bit too.’’
Verma’s local data shows that over the months of October to December, there were 92, 80, and then 72 sales. In contrast, over the months of January to April, there were 43, 63, 64, and then 62 sales.
At the same time, there has been a lift in the amount of stock on the market, he says, from about 95 to 110 houses before Christmas to about 140 for sale now. ‘‘The increase is much needed as we have a big-time shortage. So the quieter market could be partly due to there being more houses for sale, plus the traditional seasonal slowdown that comes at this time of the year.’’
Despite this, house prices currently remain strong, hitting a record median price in the Real Estate Institute’s March data, Verma says. ‘‘I don’t think prices will drop, but growth is likely to level out along with the market over the coming year.’’
Century 21 Palmerston North owner Tim Kearins says his firm has done an increasing amount of business in Whanganui over the past 12 months and he cannot see its market coming to a halt.
‘‘Whanganui has enjoyed a strong price lift but it still remains relatively affordable when compared to New Zealand’s main centres. It has some really nice established suburbs with some fantastic old homes. At the same time, it boasts plenty of entry-level housing which more and more first-home buyers are discovering they can actually afford.
‘‘We’ve been seeing more Aucklanders and Wellingtonians moving there, as lifestyle is a big factor. Whanganui has some great schools, good civic and recreational amenities, and a growing arts sector.’’
Helped by employers’ growing acceptance of remote working, Kearins says regional city markets, like Whanganui, will keep bubbling away.
While the city has seen strong price growth over the past year, it remains an affordable market and prices, particularly at the lower end of the market, are attractive to first-home buyers and investors.
Investor Dan Timmins, who lives and invests in Whanganui, says that, post-lockdown, the increased demand has led to greater competition, pressure on prices and a super-charged, ‘‘crazy’’ market.
Following the Government announcement, the market was starting to slow and investors were pulling back a bit, which meant more options for first-home buyers, he said.
‘‘But investors are not leaving the market completely: it’s more they are switching to buying properties where it is possible to add value via a subdivision and small development which could be a new build.’’
The Whanganui Council is receptive to this type of infill development as there is a major shortage of housing but the population is growing, he says.
‘‘The housing stock offers scope for this type of investment as there are still a lot of older houses on quarter-acre sections around.
‘‘It means there’s more competition at the lower end of the market where the houses need more work, because that is where people can see opportunities. But it’s helping to improve the city’s housing stock overall.’’
The market may be quieter going into winter, but it remains busy. People involved in the housing industry, including tradespeople, are flat out, Timmins says.
‘‘Due to the shortage and the number of people relocating here, I think Whanganui’s market has probably got a way to go yet – and the stock is still some of the cheapest in the country.’’