‘The market’s very, very buoyant’
Hawke’s Bay’s housing market is buoyant even though the government’s move to dampen investor interest in residential property 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.”
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.
“There’s 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 per cent 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 highend part of the market is especially so with sales over $2 million increasing sharply over the past few years.
“Sales over $2m in the last month were 18 in Hawke’s Bay and sales over $1m were 136. I looked at those stats for three or four years ago and sales over $1m were 18 and a sale over $2m would just be unheard of.”
One of the reasons for that high-end demand is the people from Auckland and Wellington who are moving to Hawk’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.
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 Realty, 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.
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 10 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-towner for $4.45m.
Another lifestyle property in Holt Road in Napier went for $2.5m to an expat.
James Macpherson, principal of Bayleys Gisborne, Hawkes Bay and Wairarapa, says people have become more selective in what they are buying.
“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.”
“People were buying stuff because they had to, there was no choice.”