New Zealand’s cheapest suburbs: Where to buy a house for less than $500,000

- Invercargill is the cheapest city for property, with many suburbs under $500,000.

- Mataura in Gore has the lowest prices, with homes typically selling for under $300,000.

- The post-Covid price increase reduced the number of affordable suburbs across the country.

Invercargill is New Zealand’s cheapest city for property, with new OneRoof research showing buyers there have the best chance of picking up a house at an affordable price.

Invercargill has the greatest share and number of suburbs where properties sell for less than half a million dollars.

OneRoof even found several suburbs where house prices are about the same as an Auckland home loan deposit.

OneRoof looked at property values in suburbs with 20 or more settled sales in the last 12 months. Of the 859 analysed, 81 - 9% of the total - had an average property of less than $500,000.

The suburb with the lowest property prices was Mataura, in Gore, where the homes typically sell for just under $300,000.

Next cheapest were Patea, in South Taranaki (with an average property value of $306,000); Kaitangata, in Clutha ($310,000); Wairoa, in Hawke's Bay ($323,000); and Runanga, in Grey ($324,000).

A real estate office in Christchurch. The city has three suburbs with average property values of less than $500,000. Photo / Peter Meechm

West Coast and Southland suburbs dominated the list, unsurprising given that both regions have an average property value of around $500,000. And while most of the 81 suburbs identified were in small towns or remote rural locations, 29 could be found in cities with strong employment prospects and amenities.

Invercargill was the city with the most "cheap" suburbs. Fourteen of the 20 Invercargill suburbs with 20-plus settled house sales in the last 12 months had an average property value of less than $500,000.

The cheapest Invercargill suburb Appleby, with an average property value of $353,000. Five more suburbs in the city - Bluff, Kew, Clifton, Strathern, and Georgetown - also had an average property value in the $300,000s, highlighting the opportunities available to first-home buyers at the bottom of the country.

Suburbs in three of the country's bigger cities also featured on the list.

In Christchurch, budget-conscious buyers had the best chance of getting a cheap home in Phillipstown ($463,000); Aranui ($490,000); and Linwood ($497,000); while in Dunedin, the best prospects were in South Dunedin ($416,000); Forbury ($447,000); Caversham ($462,000); Calton Hill ($481,000); and Liberton ($481,000).

The third major city on the list was Wellington, where the apartment-heavy suburb of Wellington Central had an average property value of $483,000. Auckland's cheapest suburb, Auckland Central, had an average property value of $554,000, while the least expensive options in Hamilton and Tauranga were Bader ($599,000) and Gate Pa ($666,000) respectively.

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Buyers looking for a half-a-million option in Queenstown-Lakes were likely to come away empty-handed. None of the district's suburbs had an average property value of less than $1m. Entry-level was Luggate, where the average property was $1.185m.

The post-Covid lift in house prices has reduced the number of cheap suburbs in New Zealand. At the start of February 2020, almost a third of the country's suburbs had an average property value of less than $500,000, and only 10% had an average property value of $1m or more (30% now).

Christchurch pre-Covid had 38 sub-$500,000 suburbs while Dunedin had 15, Hamilton two and Tauranga one. Auckland's cheapest suburb, Auckland Central, was $540,000, so only a slight change, but Queenstown-Lakes' Luggate had average property value of $767,000 - a five-year difference of $418,000.

Wellington's cheapest suburb, Wellington Central, was $58,000 more expensive five years ago, taking it out of the sub-$500,000 club. The reversal in fortunes reflected the drag on prices the slump had on the capital, especially in the apartment market.

Invercargill was also a lot cheaper pre-Covid. The city's overall average property value was $370,00, compared to $536,000 now, and every Invercargill suburb with 20-plus settled sales in the last 12 months – 20 in total - had an average property value of less than $500,000.

Taking away the filter of 20-plus settled sales, Invercargill has a total of 44 suburbs. Of those, 22 (50%) currently have an average property value of less than $500,000, compared to 31 (70%) five years ago.

The average lift in property values at the bottom end of the market since February 2020 was 49% - although the analysis identified four West Coast suburbs - Reefton, Blaketown, Runanga, and Cobden - where house prices almost doubled over the period.

OneRoof also found that the six months from the end of 2021, the height of the post-Covid housing market, were the hardest for budget-conscious buyers. Of the suburbs covered in the analysis, only 53 (6%) had an average property of less than $500,000.

- Click here to find properties for sale less than $500,000