Bay house prices rise as sales boom starts

The median property price in Napier was $338,125, in Hastings it dropped to $259,000, while in Hawke's Bay country it was $350,000. Photo / Paul Taylor

Hawke's Bay househunters are having to shell out more for a property, according to the regionwide trend, though a leading local agency says more dramatic impacts are yet to be felt.

According to data published this week by the Real Estate Institute of New Zealand (REINZ), the median price for a property in Hawke's Bay was $283,500 - a 3.1 per cent rise from January 2014 when it was $275,000.

The January 2015 median price had also increased by 3.5 per cent compared with December 2014 median property prices.

There was, however, a drop in the number of houses sold in the region during the first month of the year. The data showed 140 houses were sold in January 2015, 25.9 per cent fewer than January 2014.

Meanwhile, sales volumes recorded in January 2015 also dropped in comparison to December 2014.

There were 209 sales recorded in December.

The median property price in Napier was $338,125, in Hastings it dropped to $259,000, while in Hawke's Bay country it was $350,000.

Managing director of Tremain Real Estate Simon Tremain said house sales were off to a slow start at the beginning of the year.

"The market this year seemed to really start slowly in January.

"We had such good weather and it was hard to get people back to work and back into it, so sales didn't really kick in until the middle of January," he said.

"As a result, sales volumes are really low but certainly not on the back of a stagnant market."

By contrast, Mr Tremain said, February sales were already booming.

"Our numbers in February reflect a significant increase.

"The market is as good as I have seen it in seven years.

"The January figures were just a bit of a blip."

Mr Tremain said that, despite low sales, there was a rise in the median property price, which was driven by three factors.

"There is some upwards pressure on price.

"Interest rates are coming back and not going up as was predicted, the TSB tenure rate is just fantastic, and obviously the Government's changes to the first home buyer and KiwiSaver grants on April 1, so those three things to me are significant," he said.

"We are also starting to see a flow of people from Auckland now, buying Hawke's Bay properties."

Nationally, housing sales activity last month slowed right down compared to December 2014, dropping by almost one third.

There were 4841 dwellings sold in the first month of the year, a 31.5 per cent drop on the previous month, but a 2.6 per cent increase on January 2014.

The national median residential property price was down $24,000 on December 2014.

However, prices rose 6 per cent to $426,000, compared to January 2014.

The annual price hike was led by Auckland, where median house prices surged 16 per cent in the 12 months to January.

REINZ chief executive Helen O'Sullivan said the January slowdown was to be expected for this time of year.

"The data for January reflects the typical summer slowdown at this time of the year, with volumes dropping back and prices easing across the country," she said.

"December was a strong month, so the slowdown in January was a little more pronounced than usual."

Ms O'Sullivan said the property shortage in Auckland was mainly responsible for driving up prices.

"The continuing strong performance of Auckland prices is vexing commentators and policy makers alike. However, the root cause of the problem remains a shortage of property available for sale.

"Listings across Auckland remain very low by historical standards and this, coupled with continued high demand, is seeing prices inevitably move upwards.

"Increases in supply from new construction will help ease this position, but for the present the lack of listings is the main impetus driving Auckland dwelling prices," she said.