Hawke’s Bay’s housing market grew last year by $56 million, with Baby Boomers from across the North Island increasingly making a beeline for Hawke’s Bay.
Latest figures supplied to Hawke’s Bay Today by the Real Estate Institute show that the median house price in the Hawke’s Bay district rose $56,250 between January and December last year – bringing the average house price to $381,250.
That marked a 17 per cent jump and brought the total value of all sales to almost $1.1 billion for the year – 5 per cent up on 2016’s total spend.
Bayley’s Hawke’s Bay and Wairarapa operations manager Kerry Geange said Bayley’s agents alone had seen “incredible numbers” surrounding sale prices in just the last six months of 2017.
That was down to a variety of reasons.
“Market correction was overdue, at least in Auckland and the northern region, and they arrived here – and arrived with a vengeance, which was great. Hawke’s Bay is incredibly good value relative from where people are shifting from.”
People were also moving from southern North Island areas as well – areas like Tararua and Wellington well-represented, alongside those from Auckland and Tauranga.
“Also, what we’ve found too is the ageing population that people have been talking about is actually becoming real in terms of people making decisions on where they want to live. Particularly around that Baby Boomer age-group, they are looking to downsize and move.
“That is coming to fruition and that’s going to continue. That’s been a key driver in the market and they are coming in at all levels.”
Mr Geange said there was also a lack of rental properties, which helped drive prices up.
“Not only is there more money going into property but people are so confident in the property market they are spending more money doing older houses up.”
In addition, coastal and holiday property sales were at levels not seen for 15 to 20 years.
“When people are buying in those coastal areas, it gives you a pretty good indicator that they are confident in the economy.”
Tremains managing director Simon Tremain pointed out that last year’s sales volumes were hampered by a mid-year General Election.
“The year has been really good but we had those two quiet months around September and October with the election and then the forming of the government, so that took a little heat out of the market.
“Overall the market has moved so much in the last two years that buyers are struggling a little bit with the price levels. Open home numbers are still really strong but we no longer have the frantic ‘got to buy’ scenario, but we are still getting really good activity.”
Mr Tremain said some parts of the region had experienced a 60 per cent rise in median prices since late 2015.
“That’s a big, big movement in the market place. From my side I can only see the market continue to be really positive.”
Ray White regional sales manager Judith Domney said 2018 had already “been a busy week”.
“Everything’s going extremely well at the moment and the year is off to a good start. There have been lots of inquiries from holidaymakers who are looking to change their lifestyle.”
The strength of the region’s property market also prompted Gisborne-based BK Agency to set up a new office in Napier, and sales agent Shannon Sheridan said since setting up in July, the market had been going extremely well.
“We’ve been ticking along quite nicely. It is a little bit of a mixed bag – you still have out-of-town buyers but local buyers are the stronger buyers price-wise. We’re still thinking the market is really strong, talking to other agents they are thinking that it’s not so strong, but we are just not seeing that.”
However, Property Brokers regional manager Paul Whitaker said he expected a “slow ease” in the market later this year.
“We’ve seen approximately the same rate of growth over the past three years, properties have now increased by about 50 per cent of their value. I have a feeling that the slow-down is coming down the country.
“There’s definitely enough factors there to suggest there is a huge correction coming.”
Mr Whitaker said he expected the situation to be a slowing of the curve rather than a slump in prices.
However, much would depend on how the new Government acted around the housing market.
“The frenzy in the market of the previous three years induced by high numbers of investors in the market subsided and we saw a return to more normal levels of activity in housing markets around the country.
“Some regional areas may continue to see stronger value growth than the main centres during the year.”
REINZ chief executive Bindi Norwell said last year had been dominated by four factors.
“Last year has been an interesting one with one of the wettest winters in a long time and the uncertainty created by an election. When you combine those factors with the LVR impacts and the tightening of bank lending, it’s certainly kept the industry on its toes.
“But now the warmer weather has returned, there is the prospect of reduced LVRs in the New Year and there is more certainty post-election, we’re looking forward to things returning to normal.”