Hawke’s Bay's housing market is buoyant even though the Government’s move to dampen investor interest in residential has quelled a bit of the post-Covid buying frenzy, agents say.
Simon Tremain, managing partner of Tremain Real Estate, says there has been a slight drop off in buyer numbers but he highlights it’s only “a small drop in the ocean to be fair.”
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Demand is still extremely high but that small drop off in activity has given other buyers a little time to make a more considered decision.
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“There are so many buyers it was absolutely just getting ridiculous. People were buying stuff because they had to, there was no choice.
“They had to go and see something and just make an offer on it.”
Brad Olsen, senior economist with Infometrics, says he, too, is hearing people are taking a bit more time to do their sums before they make big commitments.
“We’re starting to hear almost around the country that people are still recognising the housing market is hot and some of them still very much want to get in but they are just taking a little bit longer overall to think about what comes next.”
Seventy percent of the reason is the Government’s investor changes announced in March and the rest is people thinking the market is pretty expensive so are being a little more cautious.
Tremain says in the Hawke’s Bay the ongoing problem is a lack of supply across all price bands, no new homes coming through and a lack of land.
The market is still strong across the board but the high-end part of the market is especially so with sales over $2m increasing sharply over the past few years.
“Sales over $2 million in the last month were 18 in Hawke’s Bay and sales over $1 million were 136. I looked at those stats for three or four years ago and sales over $1 million were 18 and a sale over $2 million would just be unheard of.”
Hawke’s Bay has become increasingly popular with buyers from Auckland and Wellington. Photo / Getty Images
One of the reasons for that high end demand are the people from Auckland and Wellington who are moving to the Hawke’s Bay for lifestyle reasons and because they can work from home.
A lot of tech businesses have set up in the area and are attracting people in, Tremain says.
Even the cheapest suburbs in Hastings have seen big price rises. “In all reality you can’t buy a three-bedroom home on a normal section for under $700,000 in Hastings any longer.”
That’s up from around $400,000 a couple of years ago and while the increase was being seen pre-Covid the post-Covid boom has accelerated the situation.
“The biggest and most notable movement over the last five years was in the last 12 months. Our median price was $275,000 back in 2015/2016. That’s gradually moved, moved, moved but it’s the last 12 months where it’s become absolutely over the top.”
Tremain hopes the market will slow a little bit, saying prices are pretty uncomfortable: “You’ve got people with $1m who can’t buy a three-bedroom home in Havelock North.”
Sabine Davison, Hawke’s Bay sales manager for New Zealand Sotheby’s International, says often when Governments change laws or shift goalposts people stop and wait for a while to see what happens. “As a result of that arguably, and it’s anecdotal at best, maybe the numbers of people through open homes might have slightly cooled off.”
However, the market traditionally slows down this time of year and even so there are multiple bidders at auctions and strong sales.
This property near Napier recently sold to an expat for $2.5 million. Photo / Supplied
Sotheby’s has achieved some record prices in Havelock North, Hastings and Napier for the first quarter of the year, she says.
“We’ve sold 40 per cent of the top ten priced properties in the residential and lifestyle markets so we find the top end is quite healthy.”
The highest price paid for a property was an exclusive lifestyle luxury one in Blackbarn Road on Te Mata Peak in Havelock North which went to an out of town buyer for $4.45 million. Another lifestyle property in Holt Road in Bay View sold to an expat for $2.5 million.
Interest in lifestyle properties had increased since Covid, and there had also been an increase of people inquiring from overseas with some buying sight unseen.
As to where the market is heading, Davison says her crystal ball is broken.
“But I just don’t see any reason why in the Hawke’s Bay the market would completely flatline or plummet because the supply has not kept pace and that is still the fundamental reality.
“You know, for years and years we didn’t see any vendors wanting to sell their property subject to them finding something and now we are seeing vendors come to us and say ‘look, any offer you bring must have a vendor subject to purchase clause’. That’s a real sign that speaks to the supply issue.”
Napier house prices have jumped post-Covid. Photo / Getty Images
James Macpherson, principal of Bayleys Gisborne, Hawke’s Bay and Wairarapa, agrees that while the market is strong people are more selective in what they are buying.
Markets go through phases and what was happening in November through to February was “almost unheard of” but there are some more listings, he says.
“The bottom line is the market’s very, very buoyant but we’ve just seen people being a bit more choosey about what they’re buying.
“I think the market is plateauing a wee bit.”
There are still exceptional sales taking place, such as two homes on James Cook Street, in Havelock North, which were strongly contested and sold in the $1 million to $1.2 million range.
More people are looking at the area from the bigger metropolitan centres as since the first lockdown last year people have realised they can work remotely more efficiently than they realised 18 months ago.
All buyer groups are active, Macpherson says, and even farms are selling well.
“We’re clearing out our stock of dairy farms and that’s happened around the country. The lift in the pay-out is obviously one of those reasons but also people are seeing dairying as one of the good returners after probably seven years in the doldrums.”
