Hawkes Bay volumes drop while prices continue to rise

The number of sales in fell by almost 20% in September as the Hawke’s Bay market continues to struggle with low listing numbers - there was only a 1% increase in new properties coming to market since August. As a result, the number of unsatisfied buyers remains high.

This excess demand has pushed the median price in Napier 18% higher than a year ago. Multiple offers are often received for well-presented homes in good locations, and some buyers miss out on several properties before finally securing one.

Most of the interest is shown by locals, who know the region and they are interested in all price ranges. The biggest increase in turnover is in the $500,000 - $700,000 price range which now accounts for almost 1/3 of all sales.

At the more affordable end of the market (less than $400,000) which accounts for over half the volume of sales, there is an even split between investors and first home buyers.

Recent falls in mortgage rates could provide support for the market, particularly given the tightness of the market in our region. On the other hand, policy changes could encourage investors to consider leaving the market.

There is a sense of wariness amongst investors after legislation was passed late last year affecting standards for rental properties. There is also the threat of a capital gains tax, which is currently under review by the Tax Working Group.

The foreign-buyer ban came into effect on October 22. However, in our area foreign buyers comprise a very minor share of our overall buyers.

Immigration flows into the Hawkes Bay appear to be moderating gradually and the economic outlook is looking a little less assured.

The competing forces at play in the market make it difficult to predict what future months will bring.

For an up-to-date report on the local real estate market please call Cox Partners Estate Agents on (06) 835-4321 anytime.