Record house prices in Hawke's Bay will likely continue thanks the region having the country's lowest inventory of houses for sale according to the latest Real Estate Institute of NZ (REINZ) report.

Hawke's Bay has just eight weeks of supply of houses, a drop of five weeks over the year to April.

The 10-year median for the number of days to sell is 46 days but in April it was 32.

REINZ CEO Bindi Norwell said few listings and strong demand drove price expectations, forcing offers "to be as clean as possible to get across the line".

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The April median price rose 12 per cent compared with April 2016, a 14 per cent rise for the region or $47,500 increase.

Sales volumes fell 26 per cent in Napier and Hastings compared with April 2016. The Easter holiday, which traditionally dampens buying, was a likely factor with Easter falling in March last year. April also was a month of poor weather.

Tremain Real Estate managing director Simon Tremain said there was "certainly no slowdown in the market" with May figures on track to be "huge".

He said out-of-towners buyers were a snowballing feature.

"The friends and family of people that have moved here are visiting them and also deciding it is a nice place to live. Our agents have three families that have moved here each with three family members or friends looking for houses."

Ray White realtor Elanor MacDonald said the shortage of listings was reflected by a shortage of houses for rent.

The only sector with listings keeping pace with demand was the top end of the market.
"There are still multiple offers for everyday houses," she said.

"Stock levels are the lowest I have ever known; the number one thing is we need to build some more houses."

Roger Hooker has obliged, releasing 14 two- and three-bedroom villas onto the market for stage two of Frimley Lifestyle Village. The development's managing director said the first stage of 23 houses had just one unsold. The final 21 houses in stage three would be released to market early next year.

Because of the strong demand prices increased for stage two, but already half had offers.

"The demand has certainly been good. It is a segment of the market for retired people who want more independence than they would get in a retirement home," he said.

The only price-dampening cloud on the Hawke's Bay property horizon is a stalled Auckland market. After leading national price increases for several years in April it had the country's third-highest level of inventory while the median price increased by just 3 per cent during the year.

Property Brokers Hawke's Bay manager Paul Whitaker said the Hawke's Bay shortage of listings meant many sellers were withdrawing from the market because they could not find a suitable new house, exacerbating the shortage.

There were a lot of "unbelievable" offers being made as some buyers panicked.
"Even on normal properties offers can be $50,000 apart," he said.

While Auckland's price growth took several years to be repeated in Hawke's Bay he said an Auckland drop would definitely affect the Hawke's Bay market.

Harcourts Hawke's Bay managing director Kaine Wilson said while an Auckland drop would be felt, the fundamentals of supply and demand would soften the blow.

"We have seen too many people come into the area," he said.