Real estate leaders on what buyers and sellers in Hawke’s Bay should expect in the coming months.
Guy Mordaunt, Hawke’s Bay Regional Manager at Property Brokers
The nation’s fruit bowl is an outstanding place to live and Hawke’s Bay continues to see strong growth in property.
The median house price has risen 42 percent across the previous three years and, despite indications to the contrary, this trend has continued in 2019.
Start your property search
The primary driver has been supply and demand. There continues to be more people looking for homes than houses available to buy.
This has created lots of competition for the available stock, maximised urgency and driven prices up.
With the rise in prices and increased compliance, a lot of rental stock has been sold, much of it to first-home buyers, which drives other segments of the market as everybody steps up the property ladder.
The national provincial drift has had a significant effect on Hawke’s Bay.
There has been an influx of Generation X and retirees from Auckland, Wellington or overseas.
This increase in population has driven locals to more affordable places, such as Waipukarau and Wairoa.
Interest rates remain low and although new subdivisions are being created, new homes are not appearing at a rate to keep up with demand.
------
Simon Tremain, Managing Director of Tremains Real Estate
Not many people would have predicted that the Hawke’s Bay median price in 2019 would sit at $470,000; yet here we are, with a local economy thriving on population growth.
Many will say that median is still low in comparison to comparable regions such as Nelson and Tauranga - but Hawke’s Bay has always just been a little bit far away from our main cities.
After eight years of no median price growth (2007-2015), we have seen a movement of 70 percent.
Hawke’s Bay has been discovered. People are moving here in droves, with the natural flow-on effect of friends and family experiencing our region and choosing to make Hawke’s Bay their home. Who wouldn’t want to live in this beautiful part of Aotearoa with our superb weather, beaches, fine cuisine and unmatched lifestyle?
So, how long will this demand continue to push house prices higher and bring more people into the region?
In my view there is little reason for it to stop.
1. The market “boom” is nothing like the pre-GFC market, with sales volumes being at normal levels.
2. All the ingredients that give a country economic growth apply to the local economy - low interest rates, population growth, consumer confidence etc.
3. The number of flights to Auckland to connect us to the wider world keep increasing.
People can work remotely and no longer need to be chained to a desk in a big city.
4. History shows all markets slow at some stage but we have so much room for further growth and such a viable position against other parts of regional New Zealand.
So, how is our current market? Fantastic.
------
Fraser Holland, Managing Director at NZ Sotheby’s International Realty
Hawke’s Bay has seen phenomenal growth in recent years. While national signs are pointing to a slow-down in the market, Hawke’s Bay is one of a handful of regions to continue to show growth. In the last 12 months, Hawke’s Bay’s median house price has risen by 9.3 percent and the number of sales is up 7.2 percent.
For the time being, the Hawke’s Bay real estate market remains buoyant and continues to benefit from the flow-on of growth in the main centres. At Sotheby’s, not a lot has changed. The region’s premium or higher value properties are in strong demand, and the agency recently brokered a record residential sale price in Napier.
Multiple offers are common.
Out-of-region purchasers lead the charge as Hawke’s Bay continues to attract new residents from overseas and larger centres including Auckland and Wellington.
Approximately 50 percent of our purchasers are from outside of the region. For these buyers, Hawke’s Bay delivers good value for money relative to alternatives.
Sellers’ expectations are in line with media comment. A strong market means high sale prices, which at times means expectations are above market.
That is a sign of a changing market. My prediction is we will continue to see growth over the next couple of months but the curve will flatten as winter approaches. There will be continue to be a strong demand for quality properties but sellers’ expectations of sale price and length of time required to sell should be realistic.
------
Elanor Macdonald, Agent at Ray White Hastings
Overall the outlook for 2019 is positive for Hawke’s Bay, but low levels of listings are holding the market back, with an average of only seven weeks’ stock in the main cities, Napier and Hastings.
However, buyers are showing strong interest in properties that are on the market, with multiple parties lining up for well-presented and marketed homes across a broad price range, all the way from entry level to over $1 million.
That is an interesting change as previously property sales over $1 million have been few and far between. We expect this trend to continue well into 2019.
Market lending rates are hovering at historic lows, with main lenders offering 3.99 per cent for one-year fixed terms.
The loosening of the LVR rates from January 1 is another positive, allowing buyers who may have been previously constrained to borrow a bit more.
The foreign buyer ban adopted in October 2018 has had little or no noticeable impact to date and it is unknown what will be adopted after the Tax Working Group submits its recommendations on ringfencing investment property losses.
However, Hawke’s Bay is one of the hottest spots in the country and I expect it will be another busy year for our agents, with steady sales volume and prices slowly rising from the current median of $495,000 in Napier and $435,000 in Hastings.
------
James Cooper, General Manager of Harcourts Hastings
Hawke’s Bay continues to be at the forefront of the strong regional property price growth. This is a reflection of a number of factors.
Some of the key pull factors driving demand include a strong local economy with low unemployment and a superb lifestyle. This has seen increased interest from people looking either to return home to raise a family or buyers looking to move from Auckland in their retirement.
At a local level, our team has seen an increase in enquiries from first-home buyers, investors and other buyers looking for a rural-to-urban shift to free up capital in retirement. This combination of strong domestic drivers and demand from outside the region is putting upward pressure on prices.
As a result, we are still in a sellers’ market, with just nine weeks of inventory remaining, compared to the long-term average of 30.
This combination of the low inventory level and the high demand has resulted in more competition amongst buyers, which in turn has driven prices up. This is reflected in the two months of consecutive median house price records in the last quarter of 2018.
Although the most recent figures indicate a slight increase in stock levels and new listings, we believe that, in the short-term, this is not enough to take the heat out of the market.
------
Kerry Geange, Operations Manager at Bayleys Hawke’s Bay and Wairarapa
Over the last six months we have seen regular record median prices achieved, while the number of days on market is 20 percent down on the 10-year average, at 32.
Listings were up 3.6 percent on the same period last year and listing prices were up 10 percent. This hasn’t lessened demand. Sale numbers are almost 4 percent up, and median prices are up 9.3 percent.
So, what’s driving demand?
Hawke's Bay is an attractive place to live, work, and do business. Tourism is booming.
Cruise ships, wineries, beaches, sports tournaments and world class events have driven record visitor numbers.
This has been supported by investment in the Port of Napier and Hawke's Bay Regional Airport, as well as local infrastructure.
The primary sector, in particular horticulture and forestry and sheep and beef farming, is forecasting busy years ahead. We are seeing this with record farm sales, significant industrial property demand and commercial developments.
More than $1 billion of development is planned or under way to support this in roading, port projects, accommodation projects, and subdivision.
This creates jobs and certainty for business, in turn increasing housing demand. Around 25 percent of all sales have been to first home buyers in the last six months. Seventy per cent of sales have been $700,000 or under. This includes existing housing stock and new builds.
And low interest rates are supporting the sale volume numbers.
Retirement villages and senior-focused housing will be the market’s next big driver.
As the ageing population downsizes into smaller and newer homes, the median price will be held up across the Bay.