New figures show that the median price of a house in Whanganui has shot up more than a third in the past year.
The figures, released by Real Estate Institute of New Zealand this week, show the median price of a house in Whanganui in August last year was $280,000. For the same month this year, the median price shot up to $375,000 - a rise of $95,000, or 33.9 per cent.
Bayleys Whanganui Residential and Lifestyle Consultant Duncan Ashby said the price rise could be put down to a lack of stock in the market.
"There's a bit of a catch-22 going on at the moment where there are a lot of people considering putting their house on the market, but the question is where do they go?" Ashby said.
"That's what is pushing the median price up. There's so many buyers in Whanganui but there's so little here to choose from. It's just supply and demand really."
For first home buyers, Ashby said that a market that was already looking tough is now looking even tougher, particularly with a rise in people looking to purchase investment properties in the district.
"Those first-home buyers are fighting for affordable properties with investors. There's a new wave of investors coming to Whanganui."
"Affordable housing two to three years ago was in the $200,000 to $350,000 price range. Now we're talking $300,000 to $500,000."
As well as an increase in prices, the amount of houses sold on the market increased too, with 58 sold in August last year compared to 80 in August this year.
Owen Vaughan, editor of online property platform OneRoof said the trends seen in Whanganui are some of the most significant across the country.
"What we've been able to see is a surge of growth in the region since the end of lockdown. That's mainly been fuelled by affordable prices in the region, which has been the story for the last couple of years," Vaughan said.
"We're seeing phenomenal growth and it's because prices are really low in the area. People see it as an attractive place to buy property and invest in property."
Ashby agrees, saying that low interest rates have had a huge effect on the property market. With money in the bank bringing in a very small return, coupled with the attraction of incredibly cheap borrowing, he says property is the obvious direction.
"We came out of lockdown, people saw the opportunity of low interest rates, and for first home buyers and investors alike it was an opportunity to get in the market quick. I think that's what's spurred the massive increase in numbers."
In terms of where to from here, both Ashby and Vaughan have a similar outlook, primarily based on where the market is currently sitting and where it's expected to move to nationally.
"Nationally house prices are tipped to rise next year, and I can't see any indication why Whanganui would be any different to the national picture. From anecdotal evidence we've seen, agents are crying out for more listings," Vaughan said.
As an agent himself, Ashby agrees.
"The crux of the situation is really the lack of stock. That's why prices don't seem to be slowing down and if anything they're just going to carry on going up."