Hawke's Bay house prices are back to record levels but with the number of houses available to buy in Havelock North down to just 60 or so, home buyers wanting to move up the chain in the rest of Hastings are "blocked in".
Latest data from the Real Estate Institute shows the region's median house price was $445,000 last month - back to the same level as the region's all-time high median, recorded in March.
"The market continues to track in the same manner it has been doing for the last couple of months, with a market that is constrained by undersupply," REINZ chief executive Bindi Norwell said.
Read more: Hawke's Bay's online property asking prices hit record levels
Rise in new-builds puts pressure on Hawke's Bay builders and cost of homesHawke's Bay house prices remain consistent
"We see a lower number of cash buyers, compared to the previous month.
"Hawke's Bay again has the second lowest inventory level across the country with only 8 weeks' supply available."
However, while prices in Central Hawke's Bay are up 24 percent on the same period last year, and Napier's prices are 13.5 percent higher, prices in Hastings are just 0.5 percent up on August 2017.
Hastings' median price last month was $54,000 down on the district's all-time median high of $456,000, recorded in December 2017.
Ray White Hastings managing director Elanor MacDonald pointed out that the lack of available listings in Hastings was the reason the district was lagging behind in terms of the median increases from last August
"Hastings stock is so low in terms of the market, there's just not a lot of houses available. The average sale price has actually gone up from $430,000 to $460,000 from last year - it's just the median that's low.
"We are totally constrained by a lack of listings. Especially at the lower end of the market. There are very few listings up to $400,000 in that first-time-buyer bracket."
Just 86 houses were sold in Hastings last month, compared to 104 in Napier.
About half the district's 140 or so existing listings were in Havelock North - rather than Hastings city.
"In the past we would have seen between 200 to 250 listings in Havelock North available, and last time I counted there it was in the 60s - and there's only about 140 listings available at the moment all together in Hastings District. So, if you take the Havelock North ones out, there's not a lot left."
However, the pressure of supply would ensure a "continued uplift" in prices.
MacDonald said moves to build two new retirement villages in Hastings and Havelock North could help unblock the supply chain for Hastings.
"Houses either need to be built but the most likely area is we have quite a lot of people who would just about like to buy into a retirement village - either who aren't quite old enough or they are already on a waiting list.
"Things will loosen up when we start to see those retirement villages start to open. A lot of those people still live in their family homes - and that's the next step for a first-time buyer - that's the house they would be buying but it's not on the market, so they can't move."
Harcourts Hawke's Bay general manager James Cooper also noted supply issues.
"The fact that Hastings had minimal movement in the median price when compared to August last year, and the fact that it was well down on July 2018, reflects the number of properties in the first home or investor category that have come onto the market and sold.
"That's because the median price reflects the price of the 'mid-point' in the range of houses sold. A larger number of first home and investor type properties selling in one month will have an impact of this price point – as was the case for August."
Tremains managing director Simon Tremain said the reasons behind the steep rises in CHB, where the median price is now $310,000, reflected the appeal of affordability and CHB's location to Havelock North and Hastings.
"There's no doubt that there is a bit of a southern drift to people buying down there. There's lots more people on that road now travelling to work. There's definitely people in Napier and Hastings finding they can buy lots for their money in Central Hawke's Bay.
Tremain said while he was concerned about the lack of supply across the region there was nothing in the market that would indicate any future slow-down.
"The concern is about supply, it's not about demand - so that only pushes prices one way.
"There is a bit of concern around supply and the continued demand. There are still a lot of buyers in the market place but the supply of total properties for sale keeps getting smaller.
"I understand there are about 400 properties on the market and about 12 months ago there were 600."
Nationally, median house prices for New Zealand increased 3.6 per cent year-on-year to $549,000.