A lack of reasonably priced new homes, flooding risks and continued challenges in the mortgage lending space are making life difficult for first-home buyers in Gisborne, agents have told OneRoof.
But the top end of the market in the region is humming, with one colonial-style home selling at auction for well above its RV and beach properties commanding $2 million.
Arizto agent Mandy Campbell said low-deposit buyers were still very much at the mercy of the banks when it comes to securing finance. And those who can’t make the sums work have to widen their search and lower their expectations.
Campbell recently sold a three-bedroom home on Grafton Road, in Te Hapara, to first-home buyers for $539,000. But homes at that price point are unusual.
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While sub-$500,000 homes do exist, they’re often in need of work or located out of town and the banks aren’t keen, putting too many obstacles in the way of buyers. “Anyone wanting to borrow [for lower-priced properties] is finding it a bit difficult,” Campbell told OneRoof.
She cited as an example one of her listings, a three-bedroom bungalow at 463 Palmerston Road, in Te Hapara, which is seeking offers over $430,000. The property is located near the centre of town and needs only minor work done to bring it up to Healthy Homes standard, Campbell said, adding: “It has huge potential.”
The listing also stresses the vendors’ willingness to strike a deal: “Our owners have had a change in their circumstances and need this home sold yesterday - in other words, it must sell asap!”
New-builds in the region were few and far between, Campbell said, mostly because of a lack of suitable land on Gisborne’s city fringe. Much of the land immediately outside of the city was used productively to grow produce, she said. “That’s our income. Leader Brand paddocks are right on the edge of town.”
This three-bedroom home on Grafton Road, in Te Hapara, was snapped up by first-time buyers for just over $500,000. Photo / Supplied
A three-bedroom bungalow at 463 Palmerston Road, in Te Hapara, is seeking offers over $430,000. Photo / Supplied
Flooding was also a problem in Gisborne. The city is sited on low-lying land at the confluence of two rivers, which means much of the city is at risk of both flooding and rising sea levels.
One positive for first-home buyers in the region is the dip in investor activity, although both Campbell and Tracy Real Estate owner Tracy Bristowe have noticed an uptick in enquiries from cashed-up retirees looking to return to the property market, with Bristowe citing the recent sale of a 1970s unit on Jackson Street, in Kaiti, to an investor for $370,000.
Rental properties are in demand in the region and rental yields are still attractive. “A three beddy is $550 to $580 a week and you’ll pay around $490,000, to $500,000,” Campbell said. “If you’ve got say $500,000 in the bank, you can make over $2000 a month. Why would you keep that money in the bank?”
A colonial-style home on Fitzherbert Street, in Whataupoko, sold to a local family last month for just over $1.1m. Photo / Supplied
A three-bedroom executive home on Potae Avenue, Lytton West, sold last month for just under $1m. Photo / Supplied
Campbell said it wasn’t clear whether the reopening of the border would boost the Gisborne market, but she had noticed that the Kiwis who returned home in 2020 were leaving the city again. “Potential first-home buyers might be heading overseas for their OE as well,” she said.
Agents told OneRoof that the top end of Gisborne’s property market was active – beach properties in Wanui were fetching upwards of $2m – although deals were sometimes harder to strike.
Bristowe said she was forced to find new buyers for a $935,000 three-bedroom executive home on Potae Avenue, in Lytton West, after a conditional offer on the property fell through.
Property Brokers Gisborne branch manager Stefan McNeely said his agency had “definitely seen a change in the top end of the market”.
“The properties are still selling. But in some cases they’re taking a bit longer to sell and maybe not for as much of a premium as they were maybe 12 months ago,” he said.
However, his firm recently achieved a top price at auction for one of the region’s most beautiful homes, the former Town and Country’s Women’s Club building on Fitzherbert Street, in Whataupoko. The four-bedroom heritage-listed home was snapped up by a local family for $1.1155m last month – $345,000 above its RV.
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