Manawatu house prices continue to hit record highs, frustrating ambitious first home buyers.
Manawatu/Whanganui house prices are the highest they've been since Real Estate Institute of New Zealand records began 20 years ago. And there's little sign the climb will stop soon, with the region seeing some of the highest increases in the country.
Manawatu/Whanganui's median house price has gone up 21 per cent, to $265,000, in the 12 months to January. Only two regions had a quicker rise in house prices; Nelson/Marlborough, up 25 per cent, and Waitkato/Bay of Plenty, up 22 per cent.
REINZ Manawatu spokesman Andy Stewart said plenty of first home buyers were still combing the market but they were facing an increasingly discouraging search.
"It's becoming harder and more frustrating for them to buy. Properties are going quick and for more than their willing or able to front up at first," Stewart said.
It took an average of 23 days for a Palmerston North house to sell in 2016, just over half the time it took in 2010.
Stewart said with interest rates remaining low, and the fierce competition between first home buyers, house prices were pushing up at the bottom of the market.
In January, 37 per cent of houses sold in the city went for under $300,000. The previous January it was 53 per cent.
But most Palmerston North houses remained under $400,000. The portion of homes sold below that mark was unchanged over the year at 73 per cent.
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Stewart said first home buyers tended to miss-out on their first few offers; but those who persisted and adjusted expectations could still get a relatively affordable house.
With 102 homes sold in the city last month, and 93 the previous January, the market looked to be settling into a long-term pattern closer to pre-Global Financial Crisis levels, he said.
January sales started falling from 2008, before settling on an average of 78 houses between 2010 and 2015. In the six years before the GFC there was an average of 122 houses sold in January.
Manawatu Property Investors Association president Pauline Beissel said the market wasn't advantageous for the group's members, most of whom where small-scale investors and landlords.
"It may well have increased their equity, but If you're buying and selling on the same market it's not an advantage."
The association had relatively normal levels of new members at the start of the year, but a few more than usual had left the property market.
Bessiel said last year had been frustrating for landlords, with uncertainty over damage liability caused by new Tenancy Tribunal guidelines and increased compliance costs for new health and safety rules.
"Their properties' values were still on the rise, so they took advantage of that to sell up and bow out."
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