Lending restrictions imposed by the Reserve Bank were meant for Auckland, not Wanganui, says a local realtor.
First-home buyers in Wanganui account for 21 per cent of house buyers, that is 4 per cent more than the national rate, but the market remains much easier for multiple property owners than first-timers.
According to figures from CoreLogic for the three months to September, 42 per cent of residential purchases in Wanganui were made by multiple property owners, unburdened by the capital gains tax proposed by Labour.
Andy Stewart, a REINZ district forum member for Manawatu, said he was surprised by the percentage and said the Reserve Bank's loan to value restrictions (LVR) had caused a "major glitch at the bottom of the market".
"I know that Wanganui sales have slowed. LVRs were supposed to slow the Auckland market but they have crippled provincial towns," Mr Stewart said.
"The only places performing reasonably well are Auckland, Tauranga, Hamilton and Christchurch."
Mr Stewart said the Reserve Bank could have considered limiting LVR to Auckland.
Nick Goodall, research analyst at CoreLogic, said first-home buyers were more prevalent in Wanganui than nationally.
"The 2014 third quarter of 21 per cent has been relatively consistent through the last couple of years," he said.
He said multiple property owners were at their highest percentage of purchases since late 2010/early 2011, while buyers new to the Wanganui market were near a historic low.