Central Hawke's Bay sees huge house price rise

Waipukurau has seen house prices climb, after prices in Central Hawke's Bay climbed 77 per cent in a year. Photo / File

House prices in Central Hawke's Bay have shot up by an average of $135,000 in just 12 months, with real estate agents reporting an increase in people moving there from Napier and Hastings.

Latest figures from the Real Estate Institute show while median price in Hawke's Bay rose 18 per cent compared to December 2016, the price Central Hawke's Bay was 77 per cent up on the previous December.

The median house price in Central Hawke's Bay is now $310,000 - up from $175,000 in December 2016.

While sales volumes in Hawke's Bay were 13 per cent down on the previous December across the region as a whole, Central Hawke's Bay experienced a 46 per cent increase.

Waipukurau-based real estate agent Jane Hamilton from Property Brokers said she had not seen a market like it in more than 20 years in the business.

"There have been significant price rises and the market in still extremely hot. Recently I sold a townhouse for $235,000 not quite a year ago, and recently sold another one in the same block for $272,000 - so that's a pretty significant rise in less than 12 months."

Mrs Hamilton said there had been huge prices increases across the board.

"Over half the buyers that are coming in are from out of town. Significant number of people are from Hastings and Napier because they can sell their houses their and go two-steps up the ladder."

However, that also meant a lot of people were missing out on property.

"The minute a new house come on the market we are getting a dozen people showing up for an open home and most of them are already cashed-up ready to go. It's an amazing market, I've never worked in one this buoyant."

Harcourts Central Hawke's Bay principal Heatha Edwards said there had been some "fantastic" price rises.

"Every eight or 10 years we do get this big surge of price rises, so it's not really a surprise. Certainly the GVs are well out and have been for some time. With the Labour Government making noise that they are going to make things very difficult for landlords, you are seeing a larger percentage of cheaper properties coming onto the market that normally wouldn't."

The threat of a capital gains tax had also encouraged people with second homes to sell up.

The Central Hawke's Bay median rise was the biggest year-on-year increase for the month of December in New Zealand, ahead of Opotiki District (60.3 per cent), Kaipara (43.4 per cent), Waitomo ( 62.8 per cent) and Clutha (55.6 per cent).

Napier also experienced big rise, with the median price now at $508,000 - $102,000 up on last year, while prices in Hastings rose $30,000 to a median of $390,000.

Mary Sammons said selling her property in Waipukurau helped her reinvest capital into rental properties in Whanganui.

"Now was a good time to sell as the property had served it's purposes for me. I relocated to Wanganui and had the home rented but with the market being so strong it made financial sense to release the capital in Waipukurau and reinvest in Wanganui. I became a home owner at age 24 and was debt free by age 35, so consider I have always been well positioned on the property ladder.

"Our tenants enjoy modern upgraded homes, while our home is not up to the same standard.

"The ongoing legislative changes to landlord requirements, risk of P contamination, keeping up with routine maintenance etc make being an absentee landlord extremely difficult. Also the Labour policy to look into introducing Capital Gains tax meant now was a good time to exit the property, and release capital into our own home upgrade, while remaining debt free."

Lin Blyth and her husband Pete moved into a lifestyle block in Waipawa last February before selling up to move into a villa in Otane.

"Prices are going up but we didn't sell for the money side of it, we sold it because I thought we'd taken on a little bit to much. We have a little bit left over to invest into the house because there is always something you want to do on your house. The house and the village in Otane seem a little more suitable for us."

REINZ regional director Mark Coffey said the figures around Central Hawke's Bay were "impressive" and down to a combination of factors.

"Supply and demand is obviously the first one. Listing are very tight, I think Hawke's Bay has the second lowest inventory in the country, so that's definitely helping to put upward pressure of prices."

Mr Coffey said the region as a whole had also represented "low-hanging fruit" for investors moving out of other markets.

"The affordability factor in Hawke's Bay is an advantage for people perhaps outside of the region and looking to move. Combine that with an attractive climate, relatively good levels of employment - there are a whole pile of little factors that are adding up to a fairly good success story for the Hawke's Bay."