First-home buyers and investors are "battling it out" for property in Whanganui. Photo / Bevan Conley
First-home buyers and investors are "battling it out" for property in Whanganui. Photo / Bevan Conley
Whanganui property prices remain "really hot".
The median sale price for houses sold in January in the Whanganui district was $485,000, while the Ruapehu District was at $391,000, according to figures from the Real Estate Institute of New Zealand (REINZ).
It's data for January show that median house prices inthe Manawatu-Whanganui region have increased by 25.6 per cent from the same time last year, from $418,000 to $525,000.
OneRoof editor Owen Vaughan said the Whanganui market had remained "really hot" after last year's Covid-19 lockdown.
"That's a result of Whanganui being a part of New Zealand where there's good employment, but also really affordable properties," Vaughan said.
"Properties are still in that sub-$500,000 mark, although that's starting to look fairly vulnerable now.
"It's really quite astounding that the median house value in Whanganui has gone from somewhere in the mid-$300,000 range to $450,000 in the space of really only 10 months."
Vaughan said it was important to note the difference between median price and median value.
"Median price is just looking at all the sales that have happened in a given period and settling on the middle figure, while the median value is looking at the values of all the properties, as well as all the sales.
"The median value is a more accurate figure and less prone to fluctuation."
The two main groups "battling it out" for properties in Whanganui were first-home buyers and investors, Vaughan said.
"The majority of these first home buyers are locals, but there are others moving from more expensive parts of the country, either for employment or remote working.
"Investors see Whanganui as a good spot to pick up some really affordable stock, so they'll get some returns on their investments."
Vaughan said outside investors would be finding it harder to purchase property, however, because of changes to loan-to-value ratio restrictions.
A loan-to-value ratio is a measure of how much a bank lends against mortgaged property, compared to the value of that property.
The Reserve Bank of New Zealand has stated that LVR restrictions for investors will be raised to a maximum of 5 per cent of new lending at LVRs above 60 per cent from May 1 this year.
"That may slow down the pace of growth in Whanganui, but not to the extent that prices will level off, it's just going to be a slower upward ascent," Vaughan said.
