Stock shortage dominates

REINZ

data again reported strong results in August with 123 sales in Napier and 106 sales in Hastings.

Strong enquiry from people outside of the region continues, including people quitting metropolitan areas for a quieter life in the regions, and people returning from overseas.

Low interest rates have made purchasing a home more affordable and encouraged investors seeing higher yield than banks offer to consider property.

First home buyers taking advantage of the reserve banks removal of Loan to Value Ratio requirements and have entered the housing market in high numbers. However, there is now some evidence that this rush is now fading.

Banks appear to have tightened lending criteria for people who are self-employed, receiving irregular income, and working in the most heavily affected sectors (like tourism and hospitality).

The flurry of sales and supply shortage has supported prices resulting in a 20.1% annual increase in median house prices. In August Napier achieved a median price of $615,000 and Hastings $600,000.

The dominant theme in Hawkes Bay is a shortage of listings. Listings at the end ofAu

gust were 55% below the August average for the past ten years. This degree of tightness is worse than the all-NZ average of 35%.

There is now so much awareness of a shortage of stock that some people are unwilling to sell until they buy. As a result, the listings shortage has become self-perpetuating.

While expectations remain positive for real estate in Hawkes Bay, factors to keep an eye on include slower wage growth, reduced employment prospects and reduced consumer confidence. To view our full review report go to https://coxpartners.co.nz/market or call us on (06) 835-4321 anytime.