Entry-level homes are proving to be a hard sell in Napier and Hastings, agents have told OneRoof.
While demand for larger, well-presented homes remains high, smaller homes are sitting on the market for longer.
First-home buyers and investors have pulled back this year, but, in Hawke’s Bay an uptick in demand for retirement village homes has left the bottom of the housing market in a weakened state.
Downsizers have really taken a shine to retirement villages, Ray White Napier agent John Martis told OneRoof. “Beforehand, they would have purchased a stand-alone property. Now they’re looking for the next 20 years in life, and a home in a Summerset or a BUPA retirement village suits them better. That's actually changed the dynamics a little bit and some of those two-to-three bedroom homes are taking a tad longer to sell.”
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The planned Summerset Palms retirement village in the Te Awa suburb of Napier is helping drive this phenomenon. The development will eventually include 241 independent living villas, around half of which have been built so far.
The biggest blow to the entry-level market has been the drop-off in activity by first-home buyers, and even though the relaxation of the Credit Contracts & Consumer Finance Act (CCCFA) regulations last month will improve lending conditions for those hoping get a foot on the property ladder, Martis hadn’t seen any uptick in the market.
This three-bedroom home on Kirkwood Road, in Flaxmere, Hastings, sold last year for $550,000. Photo / Supplied
Investors, who also compete for properties at the bottom of the market, were also thin on the ground. Hastings-based Tremains agent Andrew Clark said he hadn’t seen an investor since December.
Martis said sales activity was quieter now than it had been at the height of the market, with settlements taking a lot longer. “Most of them are chains,” he said, adding that one positive note was that vendors were increasingly meeting the market on price. “It's taken eight months for them to understand that the market goes up and down.”
Clark agreed. He sold a three-bedroom home on Kirkwood Road, in Flaxmere, for $550,000 at the height of the market in December. A similar property in today’s market might sell in the high $400,000s, he said.
Stuart Christensen, general manager of Tremains’ offices in Napier, Taradale, Hastings and Havelock North, said that buyers who were out shopping for a home tended to be pre-approved for mortgages.
This four-bedroom luxury home on Boyd Road, in Poraiti, on the outskirts of Napier, was bought by an Aucklander. Photo / Supplied
A three-bedroom home on West Place, in Greenmeadows, Napier, recently sold for $1.25m. Photo / Supplied
Fixed price listings were the way to go for many sellers in the current market, he said. “That seems to be quite an attractive way to put your house above the rest in this market.”
The $1 million-plus market in Hawke’s Bay, though, is in a different league. Homes in the top price brackets are still attracting buyers from outside the region, from Auckland, Tauranga, Taupo and Queenstown.
Martis cited the recent sale of a lifestyle property on Boyd Road, in Poraiti, on the outskirts of Napier. The four-bedroom luxury home, which sits on a 2.04ha section and has a RV of $1.65m, was snapped up this month by an Auckland buyer for an undisclosed price.
And a cashed-up buyer from Taupo bought a modern three-bedroom home on West Place, in Greenmeadows, Napier, for $1.25m – a price that’s $450,000 above its RV and $300,000 more than what it last sold for in October 2020.
Martis said both buyers plan to work from home.
Christensen predicted a pick-up in the Napier and Hastings housing market in spring, which is when sellers traditionally bring their homes to market. Banks are indicating that they have money to lend, he said, which is a good sign. “They want to get money out.”
Clark is also optimistic and is about to bring to market around 120 sections across three subdivisions in: Frimley, Howard Street, Parkvale and Belgrove Drive, Waipukurau.
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