Castlecliff has experienced a five-year value rise of 162.3 per cent, the seventh-highest in the country. Photo / Bevan Conley
Castlecliff has experienced a five-year value rise of 162.3 per cent, the seventh-highest in the country. Photo / Bevan Conley
The average Whanganui property value has dropped significantly since a peak in the first quarter of 2022.
Figures from the latest OneRoof Property Report covering the 12 months to the end of October 2022 reveal an average value high of $613,400 on February 21.
Since then, it has fallen 10.03 per cent ($61,000).
Bayleys Whanganui’s principal agent and sales manager Michael Bourne said Whanganui had escaped the worst of the price drops, and it was more of a balanced market currently.
“Now they are facing higher interest rates, and those who are coming off fixed-term mortgages and fixing at a higher rate, that’s going to cause some financial difficulty as well.
“It’s going to make them more cautious about moving up the property ladder.”
No-one knew what was going to happen in the property market, with there being a lot of unknown factors, Vaughan said.
“We are really looking at a period where the real estate industry goes into a period of hibernation, much like when the country goes off to the beach through December and January.
“A lot of people [real estate agents] might not see a pay cheque until March or April next year. That is going to be really tough for those coming into the industry.
“I think there will be a slimming-down of that workforce next year. It’s tough out there for buyers, sellers, and agents.”
Both the highest and lowest sales for 2022 came in March, with a property on Eaton Crescent, Otamatea going for $2 million, and one on Matai Street, Castlecliff selling for $215,000.
The suburb with the highest average property price for the last 12 months was Brunswick with $1,015,000, followed by Westmere at $1,006,000.
Ritesh Verma says the Whanganui property market is an "adjustment phase". Photo / Paul Brooks
Property Brokers’ Whanganui branch manager Ritesh Verma said the Whanganui property market was still in an “adjustment phase”.
“Vendors are starting to meet the market, with buyers not as active in the marketplace and certainly not as cashed-up as they have been in previous times.
“In saying that, this week alone we’ve done three [properties] with over four offers each on them.
“For well-priced and well-marketed homes, we are still getting multiple offers.”
Inflation was the elephant in the room and wouldn’t disappear overnight, said James Wilson, director of valuation at OneRoof’s data partner Valocity.
However, while cost of living pressures were reaching across all parts of people’s daily lives, there wasn’t a significant drop in spending.
“That’s probably because a lot of people still haven’t had to fix their mortgage at a higher rate,” Wilson said.
“When that happens and those mortgage rates begin to really bite, then spending is likely to dry up.
“Obviously, that has bigger economic impacts, but the key question is: will inflation be tamed by traditional policy, or will a hard, economic landing do the job? At this point, a lot of signs point to a harder landing than would be ideal.”
Castlecliff experienced a five-year value rise of 162.3 per cent, the seventh-highest in the country.
That suburb had been recognised as one with real potential for a number of years, and that increase came as no surprise to people in the industry, Bourne said.
“People have seen the possibility of good capital gains there.
“Honestly, I believe it will continue on that track.”
He said momentum in the Whanganui property market would continue through summer.
People were getting their heads around the fact that interest rates were higher, and banks had a willingness to loan money at the moment.
“There will still be challenges, but that balance will stay in the market,” Bourne said.
“I don’t see things roaring away or collapsing. It will be status quo, really.”
Michael Bourne says he doesn't expect property values to have fallen another 10 per cent by this time in 2023.
Vaughan said like the rest of the country, the Manawatū-Whanganui region had been hit hard by changes to the Credit Contracts and Consumer Finance Act (CCCFA) and rising interest rates.
As a result, its property market was heading into an “extended slump period”.
“Ironically enough, it’s probably a good time for first-home buyers because they don’t have much in the way of competition, especially with investors running for the hills,” Vaughan said.
“If you’re feeling confident and have the financial backing, now is the best time to be out there on the market. Vendors know that last year’s prices are just fantasy-land, and they are being realistic about where things stand at the moment.”
Bourne said he didn’t believe there would be another value drop of around 10 per cent at the same time next year.
“Even if it did drop a few per cent, that’s still only erasing some of the massive gains we had post-Covid.
“Those who purchased early on are still doing very, very well with the gains they’re getting.”
Elsewhere, the country’s highest five-year value change was in Raetihi, up 212.3 per cent to $406,000.
Patea came in second with an increase of 175.6 per cent, and also had a 21.9 per cent rise in property values over the last 12 months.
Waverley in South Taranaki was up 167.3 per cent over the past five years and Hunterville wasn’t far behind, with a 152.8 per cent increase.
Bourne said around 40 per cent of buyers in Whanganui were from out of town, particularly from areas of the lower North Island like Wellington and Kapiti Coast.
“People coming from those locations have more money to spend, and that’s what’s driving the activity here.
“It’s mainly those who are relocating, as opposed to investors.”
Investors were still active in the market, but with higher interest rates, rental yields weren’t looking quite as strong, Bourne said.
Verma said he was looking forward to next year, and there was still a lot of positivity.
“We are still getting population increase here. It may not be as fast, but people are still coming.
“As long as people stay, houses will still sell.
“If vendors meet the market, their properties will sell. It does take a lot longer, so if you need to move on in three or four months, now is the time to put it on market.
