Sold signs are dominating the residential real estate landscape throughout the Tararua, with a 50 per cent rise in sales in Dannevirke last month, compared with the same time last year.

Dannevirke sale volumes are outstripping other areas in Hawke's Bay, where sales are up 21 per cent. Sales in Hastings are up 18 per cent and 24 per cent in Hawke's Bay Country.

"There's demand from everywhere for homes in Dannevirke, with a range of buyers in the market," Nigel Jackson of Property Brokers said. "We've a number of out-of-town buyers, investors coming back into the market, as well as local buyers."

Rental returns are reasonably good in Dannevirke and homes affordable, increasing the demand for homes here.


"In every other Property Brokers area there are multiple offers and people are missing out on purchasing in those areas, so they're looking to Dannevirke," Mr Jackson said.

And with housing stock levels considerably lower compared with last year, it's a matter of supply and demand.

"In the three months to the end of May there were 47 sales here compared to 33 last year, so we've a very limited market and not a lot of new listings," Mr Jackson said.

"It's listings which are the big thing because we've strong inquiries and there are buyers for most properties."

Real Estate Institute figures show the region is experiencing a dramatic shortage of listings with the weeks of inventory falling by 67 per cent over the past 12 months and less than eight weeks' supply on hand.

Hawke's Bay and Wellington have the fewest properties for sale with under eight weeks of supply each, followed by Auckland with 10 weeks of supply and Otago with 11 weeks.

"May marked the first time the national house price breached the $500,000 mark. As 2016 progresses we are seeing regional markets such as Hawke's Bay, Waikato/Bay of Plenty, Central Otago Lakes and Northland strengthening in both prices and sales volume, while the large main centre markets of Auckland and Canterbury are taking a back seat," said Bryan Thomson of the Real Estate Institute of New Zealand (Reinz).

While the May median house price rose 20 per cent in Napier, compared with May last year, it fell across the rest of the region, including 3 per cent in Dannevirke and Napier.

There's demand from everywhere for homes in Dannevirke, with a range of buyers in the market.


However, Mr Jackson said the current median house price in Dannevirke is $130,000 for the five months to the end of May, compared with $132,000 for the same period last year.

"Our average sale price is $151,000, the same as last year, and shows we have a stable housing market," he said.

Wairarapa MP Alastair Scott said he believed high housing prices would drive people from Auckland to the provinces.

"A lot of people are coming to Dannevirke. This will bring new faces, new money and hopefully children to the district."

The median days to sell for Hawke's Bay improved by four days in May, from 33 days in April to 29 days in May - the fewest number of days to sell for a May for Hawke's Bay and the lowest since February 2004.

The May Reinz figures follow an exceptionally busy period in April, PGG Wrightson real estate agent Paul Clayton said.

"In April we had 41 property sales across the Tararua, more than twice as many as the same period last year, when there were just 19."

And while the rise was seen across the district in April, Dannevirke was out in front with 20 residential sales across a variety of price ranges, with the least expensive house, a two-bedroom, selling for $58,000 and the most expensive, a three-bedroom house, $330,000.

Seven properties sold below rateable value and 12 above with one not having a rateable value, Mr Clayton said. Two of those sales were sections while the Tararua lifestyle market had nine sales, with six of those in Dannevirke.

In contrast to April's lowest price of $58,000 not one house sold for less than $100,000 in May.