Wanganui homes among most affordable

John Maslin | 11th March 2010

If home buyers are looking for reasonably priced real estate, Wanganui is making a pretty strong case to be considered.

In a snapshot of median prices collated by QV and BNZ in the last quarter of 2009, Wanganui stands out as the most affordable centre in the North Island to buy into a home.

With an average median price of $212,000, Wanganui was the most affordable city for residential property with Rotorua next ($229,000) then Gisborne ($255,000).

And that has been endorsed by Philip Kubiak, branch manager of Property Brokers Wanganui.

"We've got first home buyers active within the market and some of the mortgage brokers, particularly some aligned with Kiwibank, are putting together pretty amazing deals for younger people who are first home buyers," Mr Kubiak said.

However, he said the market remained very flat.

"Since December we had a low of 32 residential properties sold and that's really poor. And although we've stretched that out to about 40 in February, it's still very tough.

"We need 70-80 sales for the market to start bouncing back," he said.

Mr Kubiak said more buyers were now much more realistic with their price expectations.

"It's the way they will meet the market and inevitably the houses that are selling are those that are more competitively priced than the others around them.

"And the buyers are looking at their finances. They're making comparisons and inevitably going for the best deal."

He said he expected the market to gain some traction over the next three to six months.

"At the moment it's a matter of hanging in there and doing the basics well. We have to remain optimistic.

"Mid to late last year we were seeing 50-60 sales a month but that's cut back in the last four months and it's been hard yakka," Mr Kubiak said.

Median prices have fluctuated across the city's suburbs between the third and fourth quarters of 2009. For example, median prices in Aramoho increased by nearly 8 per cent in that period, while Castlecliff prices shrank by almost 10 per cent.

Real estate sales data is provided in the main by the Real Estate Institute and QV, which is the country's biggest valuation and property information company.

QV records the result of every sale across the country and uses a system called "E-valuer". E-valuer estimates current market value based on recent sales of neighbouring properties. These individual values are used to estimate the value across a wider band such as a suburb.

But in the short term median prices can actually distort the reality.

If the median prices for a particular area - say Tawhero - slip from one month to the next then it may be because there were fewer high-priced houses sold so the market is flat rather than falling.

That's why the median price is a guide and not the precise gauge.