Boom times stretch property market
Competition is starting to wear thin in Hawke’s Bay’s commercial property market, which has been experiencing its most buoyant sales period in over a decade.
Valuer Turley & Co’s latest property market report found the first six months of 2017 had good levels of activity off the back of a ‘‘humming’’ 2016.
It was the region’s strongest market since before the global financial crisis.
But while there is still solid demand for good investment properties, competition is dwindling, the report says.
‘‘Competition has thinned as banks tighten credit availability and others sit on their hands in election year. It is harder to finance commercial property now than it was eight to 12 months ago.’’
There has also been a ‘‘stark reduction’’ in the number of good quality properties up for sale, which is frustrating buyers, it says.
This coincides with a low number of investment sales first half of 2017.
However, there has still been dozens of multimillion-dollar commercial and industrial developments, and sales, it says.
‘‘The stars continue to be aligned for the Hawke’s Bay’s economy that will likely continue to ramp for the foreseeable future, provided there are no major external shocks.
‘‘There is a bow wave of optimism.’’
The largest development planned is a $100 million berthing facility at Napier Port ‘‘in response to record-setting export volumes led by high growth in local viticulture, horticulture and forestry’’, the report says.
Rapid expansion of pipfruit and viticulture insulated the province from nationally poor dairy performances, which are now rebounding, it says.
Meanwhile, prime industrial properties are ‘‘keenly con- tested’’ as shown by sales last year of BOC Gas Napier and PBT Transport buildings, the report says.
In addition, retail vacancy in Napier and Hastings has improved, but the fringes are ‘‘anaemic’’, partially due to the popularity of big box retail, it says.
In the office market, seismic performance has been a lead factor in considerable commercial property activity since 2012.
While there remains room for growth, Turley & Co’s report says it is possible the Hawke’s Bay market is at or near a peak in commercial properties’ valuations.
Prime industrial properties are keenly contested in Hawke’s Bay.