Small towns feel demand for cheap houses

Hawke's Bay's cheapest houses can be found to the north and the south.
The region's cheapest houses can be found in Wairoa, where a paltry $25,000 would buy you a home in Corkhill Avenue.
Close on Wairoa's heels is Dannevirke where $39,000 would buy you an ex-State house. Coming third was Takapau, where $50,000 was needed to buy the cheapest home.
Wairoa's cheapest house was a four-bedroom home on a 677sq m section in Corkill Avenue that sold for $25,000. The most expensive was a three-bedroom house on a 918sqm property in Clyde Road that went for $113,000.
The owner of Wairoa's The Professionals McIntyre real estate, Denise Whitmore, said the property market was "flat-out" these days.
"We're getting enquiries from all over New Zealand, from Auckland, Gisborne, Christchurch. They have been a wide cross-section of people, young families and older people. It's really busy," Ms Whitmore said.
The market was much busier than last year, and property values had increased.
While the average price for a for a three-bedroom house was now $75,000, a year ago the same house would have sold for $60,000, she said.
Craig Boyden, manager of Dannevirke's For Homes real estate, said homes were becoming less affordable in southern Hawke's Bay and first-time buyers were most likely to be affected.
Mr Boyden said the cheapest house on his books was an ex-State house in Dannevirke's Victor Street, selling for $39,000.
Lifestyle blocks in the Dannevirke area had been selling for around half a million dollars, while top-end urban homes were selling for over $300,000.
Harcourts Dannevirke sales consultant Brenda Dodunski said prices had gone up beyond the range of many first-home buyers.
Investors had brought many of the homes in the $80,000 price bracket, and first-home buyers now had to increase their budget by another $20 to $30,000.
Despite this, she said there was no noticeable drop-off in the number of people buying homes.
Property Brokers Dannevirke branch manager Kerry Sutherland said first-time home buyers were purchasing more expensive properties, but in Dannevirke even the dearer properties were affordable.
A four-bedroom villa "in poor repair" in Dannevirke could be brought for $60,000.
The cheapest house on Hawke's Bay Realties books in Central Hawke's Bay was a $50,000 one-bedroom cottage on a quarter-acre section in Takapau township.
Real estate agent Craig Fairgray said there's was shortage of good quality listings in Central Hawke's Bay because it had become so popular.
The most expensive was property in Otane where a "lovely big old villa" on a one and a half-acre section is on the market for $400,000.
Heather Edwards of Harcourts said it was becoming difficult for the average buyer to find a super-cheap property in Central Hawke's Bay. Their priciest property listed was a $400,000 to $450,000 Waipukurau home, with four bedrooms, and inground pool and "all the goodies".
Hawke's Bay Real Estate Institute president Paul Harvey said the cheapest houses in the Hastings district were in the Flaxmere suburb where they often sold for less than $70,000.
A three-bedroom town house in Tarbet Street, Flaxmere, had sold in November for $62,500 when its rateable value was $65,000.
The district's most expensive, a four-bedroom house on 1446 sq m of land sold in Selwyn Road, Havelock North, for $812,000 when its rateable value was $98,000.
Napier's lowest-priced house in Bestall Street, Maraenui, sold a year ago for $80,000.Only nine properties sold for less than $100,000 in the last year - the last in Darwin Crescent, Maraenui.
In September property in Guys Hill Road sold for $1 million and in March one in Avenue Road sold for $1.050 million. Historically the highest price sale in Napier was $1.3 million for a property in Madeira Steps.
Mr Harvey said the ever widening gap between the cost of a Hawke's Bay home and the average regional wage was not stopping people from buying.
"Our market has been incredibly strong over the last few years and still is strong. There's been a large volume of sales," Mr Harvey said.
Because interest rates had come down, banks were prepared to lend buyers up to 95 percent of the purchase price, and mortgage payments could last up to 30 years, people were able to borrow more money in the past and take longer paying it back, he said.
Former president Chris Tremain said Napier's rising prices did not seem to have affected the affordability of houses.
"It has not affected the volume of sales significantly.
While sales fell off a little in November and December volumes were high throughout most of last year," he said.
Bay's cheapest homes
* $25,000: Four-bedroom house in Corkill Avenue, Wairoa. * $39,000: Ex-State house in Victor Street, Dannevirke. * $50,000: One-bedroom cottage in Takapau, Central Hawke's Bay. * $62,500: Three-bedroom town house in Tarbet Street, Flaxmere, Hastings. * $80,000: House in Bestall Street, Maraenui, Napier.