With Hawke's Bay houses remaining at a record median price for a second month, experts say the region's housing bubble is far from bursting.

The latest data from the Real Estate Institute of New Zealand (REINZ) showed in December Hawke's Bay's house prices rose 11 per cent from the year before, to rest at November's record median price of $345,000. They rose $34,500 compared to December 2015.

Tremains Real Estate managing director Simon Tremain said the market was showing no sign of slowing.

Over the holiday period they experienced a steady flow of listings, while interest from out-of-towners remained high.


Interest remained high for Property Brokers, as Hawke's Bay manager Paul Whitaker said there was good pressure in the market, albeit a slow down with investors at the bottom end of the market.

REINZ showed prices increased dramatically across the region compared to the year before - with a 262 per cent increase in Central Hawke's Bay, and 20 per cent increase in Napier.

However, there was little movement compared to November, with prices rising 57 per cent in Hawkes Bay Country, 6 per cent in Napier, but falling 3 per cent in Hastings.

Cox Partners managing director Malcolm Cox said much of the growth being seen was "catch-up" compared to other parts of the country.

The market was facing a "headwind" however, with movements in interests rates, tighter credit availability, and investors being less active.

Mr Tremain said current prices meant it was a good time to both sell, with vendors receiving good prices, and buy, with prices continuing to rise.

Ray White managing director Elanor MacDonald said although prices were not going up as fast as they had in other parts of the country, they were steadily increasing and showed no sign of slowing.

The market pressure was also causing rents to rise - with the latest Trade Me Rental Index showing rents in Hawke's Bay rose 16 per cent over the past year.


Resting now at $360 per week across Hawke's Bay from $310 last year, this was in line with sharp increases around the country.

In Hastings the average weekly rent was $320, while in Napier it was $370. One of the sharpest increases in rent was for apartments in Napier, which rose from $290 in December 2015 to $483 last month.

Mr Whitaker said Hawke's Bay was in an "unusual position", where a lack of properties meant landlords could move rent prices.

More pressure was also being put on the rental market with a lack of investment properties being bought, he said.

Hawke's Bay was one of the few regions around the country to hit "double-digit" median rent rises, and the highest, beating Waikato's 11.4 per cent, and Bay of Plenty's 10.8 per cent.

Head of Trade Me Property Nigel Jeffries said last year started "relatively sedately", and accelerated significantly in the last few months.

"We've seen rents across the country grow pretty sharply from October, and we expect to see further jumps in January when landlords reassess the financial equation for their investment property and when a number of tenancies come up for renewal."

While December was usually a quiet month, rents nationally jumped over 7 per cent - the largest monthly change observed all year.

The index - produced from monthly Trade Me Property data of rented properties - showed the national median weekly rent hit a record $450. ​