After seeing the median house price jump $250,000 in two years, even cashed-up out-of-towners are finding they cannot afford to buy in Napier’s thriving Ahuriri suburb.
Statistics supplied to Hawke’s Bay Today by the Real Estate Institute show the median house price in the waterfront suburb has shot up from $460,000 in November 2015 to $710,000 at the end of last month.
Sotheby’s International Realty central region managing director Fraser Holland said prices had now reached levels that were out of reach for many out-of-town purchasers, who were expecting similar prices equivalent to other affluent Napier suburbs.
“We’ve had a couple of good sales here recently as sales continue to climb above expectations and above appraisal ranges.
“A lot of people are very unrealistic about what you can get into, what levels you need to pay to get into Ahuriri. You get people from out of town thinking that it’s still relatively value-real estate but it’s certainly the suburb that’s just climbing.
“There’s such a significant jump in values from Ahuriri versus other suburbs, even the close suburbs and so people’s expectations are that Napier and Hawke’s Bay are quite homogeneous and so that surprises a lot of people and puts a lot of purchases out of reach. They come with very high expectations, which is great, but really some of them have got budgets that don’t extend to Ahuriri.”
The area was “still some way off” reaching Auckland prices but Ahuriri was probably “the Devonport” of Napier.
“So when you put a property on the market in Ahuriri you need to be confident about its value.”
Tremains managing director Simon Tremain said the rise in the area’s popularity and subsequent rise in prices was “massively” due to the sun aspect.
“Ahuriri is north-facing and obviously it is close to the water, it has a cafe scene going on and it has got the bars. I think a lot of people like living close to the amenities and the sea, as opposed to I guess on ‘the hill’, the hill was always the most popular place prior to Ahuriri coming on board. So, now Ahuriri and Westshore to a slightly lesser extent, have become very popular in the last five to 10 years.
“Recently, its only in the last two years that prices have started going north very quickly. That’s probably in that period where we have seen the biggest gains and the most notable rises on the back of a moving market. When you have a moving market, the most popular places become more popular.”
Mr Tremain said most of the people moving into the area were “empty-nesters” retiring to Ahuriri.
“Most of the investment property has been priced out of the investment market. Smaller investment properties that used to get a return on people are now converting them and living in them.
“Some people are still buying to live in down the track, renting them out in the short-term but the medium to long-term view of going to live there.
“There are a lot of empty-nesters going there, you get the odd young couple but it is mainly empty-nester who are leaving the family home and coming to Ahuriri to enjoy the sun and cafes.”