The Manawatu region continues its upward beat achieving strong median year-on-year growth for October. Palmerston North City, Horowhenua
and Tararua being standout performers – both achieving Record Median Sale Prices.
The region has one of NZ’s lowest Days to Sell at only 22! Much less than the 10-year average for November of 35 days. It suffers from low
stock levels (a common theme across the country). There were 6 weeks of inventory in November 2020, three weeks less than the same time last
year (REINZ Monthly Property Report – Dec 2020). The current state of the market means purchasers have to really be on top of their
game and active in the marketplace, or risk missing out on potential investment opportunities.
Record median prices have been seen in many of the regions’ territories:
Palmerston North City - up 27.0% to $602,000 from $474,000 same time last year
Manawatu – up 15.9% to $521,500 from $450,000
Rangitikei – up 19.3% to $367,000 from $307,530
Horowhenua - up 29.9% to $500,000 (Record) from $385,000
Tararua – up 64.0% to $405,000 (Record) from $247,000
Overall = Strong regional median sales growth at +25.8% versus November 2019
Although the region has had record high growth, affordability remains very attractive when compared to other parts of New Zealand; NZ Median
$749k (Record), Auckland $1,030k (Record), Wellington City $980k (Record), Hamilton $692k (Record), Tauranga $835k (Record).
Despite the uncertainties with COVID-19, the positive regional economic outlook remains unchanged. Palmerston North City - the business hub
of the Manawatu region - has been cushioned from the impacts of COVID-19 by a high government share of salaries and wages (38% share) and
low dependency on international travel, most travel to the region comes from domestic tourism as well as business. The regions economy is
well known for its stability and is buoyed by agriculture and education. The city's housing market has long had a reputation for being
steady, but more recently has experienced stellar growth.
The city has a growing population and is looking forward to several large-scale construction and commercial investment projects. The region
is about to receive significant fiscal stimulus from the government for the Manawatu Gorge replacement motorway (expected to be completed by
2024), Ohakea Airforce base upgrade, and KiwiRail freight hub. Total investment into the region is expected to be between $2B to $4B,
bringing with it many new jobs which will increase demand for housing in a market already suffering from short supply. This demand has also
caused rents to rise in-line with property values. Gross rental returns range from 4.2% to 5.3% in Palmerston North City (*Core Logic - Nov
On the investment front, low supply is making it harder to secure investment property and competition is strong, with most buyers finding
themselves in multi-offer situations. You must act quickly and being on the ground is important.
It's not just about finding a deal, to truly grow as an investor you need to plan towards your end portfolio and work with people who can help you move towards that vision. iFindProperty has a service that achieves that for clients, and we are excited to share it with you
As an accountant is not a place for my personal political opinions, but professionally speaking I’m pleased with this result, and cautiously
optimistic we might have a friendlier tax environment for the property sector for at least a few years. But what does this mean for property