Hawke's Bay property market boosted by first-home buyers and returning citizens

Combination of first-home buyers, returning expats and those escaping big cities helped boost the Hawke's Bay property market. Photo / Warren Buckland

First-home buyers, returning expats and Auckland runaways have helped boost the Hawke's Bay property market ahead of its already strong pre-Covid position.

The nationwide housing market started the year in a good place, according to a new OneRoof Property Report, registering 9.1 per cent value growth for the 12 months to March 25 - the day before the country went into a lockdown.

But OneRoof editor Owen Vaughan said after an initial drop, values on the OneRoof-Valocity house price index have strengthened and are up 5 per cent on seven months ago.

The best-performing regions are Gisborne and Hawke's Bay, where values are up 10 per cent and 6.7 per cent respectively.

"A lot of that has been fuelled by the relative low cost of housing in both regions and equity being pulled out of Auckland to go into cheaper markets," Vaughan said.

The median value of a property in Hawke's Bay is $560,000.

Hawke's Bay areas with the current highest median property values are Tukituki ($1.9m), followed by Kahuranaki ($1.37m), Roys Hill ($1.29m), Waiohiki ($1.18m) and Pakowhai ($1.11m).

Tremains central region general manager Stuart Christensen said those returning from overseas and first-home buyers helped boost Hawke's Bay's property market. Photo / Supplied

Tremains central region general manager Stuart Christensen said those returning from overseas and others looking to escape the big cities have created a strong market in Hawke's Bay.

"You've got people moving regions who've seen the good climate, location and job opportunities," he said.

"Although prices are still strong, they're still affordable for a lot of people – especially if they're coming from places like Auckland."

"The market was going really well before lockdown, but the buyer rate is probably higher than it was," he added.

The area with the biggest yearly increase on median property prices was Tarawera, Hastings, which had a 367 per cent increase.

The average property price rose from $45,000 in October 2019 to $210,000 at the same point this year.

This was followed by Tikokino (+58 per cent), Tangoio (+51 per cent) and Te Pohue (+47 per cent).

The biggest fall was in Frasertown, where the median property value decreased from $225,000 in October 2019 to $70,000 in October 2020 (-69 per cent).

This was followed by Pukahu (-47 per cent), Pakipaki (-46 per cent) and Bridge Pā (-39 per cent).

Vaughan said the "fear of missing out" also played a role in the rise in house sales nationwide, with first-home buyers deciding now is the best time to get on the property ladder.

First-home buyers represented 25 per cent of new mortgage registrations in the first six months of 2015 - now they represent more than 35 per cent.

"Often the struggle for first-home buyers is that they're in areas with competition with other buyers, making it a lot more challenging," Christensen said.

"But you've only got to look at interest rates and KiwiSaver – it's a great opportunity right now to take advantage of them and get into the market."

The area of Hawke's Bay with the most properties sold in the past 12 months was Havelock North (281), followed by Taradale (227), Flaxmere (135) and Waipukurau (116).

The maximum sale price in the region in the last year was in Raukawa, Hastings, where a property sold for $3.4m.

This was followed by properties in Haumoana ($3m), Bluff Hill ($2.4m) and Ahuriri ($2.25m), according to the report.

Christensen said with less money spent on overseas travel, more people are buying and renovating properties.

"If interest rates stay low and unemployment stays relatively unaffected, there is no reason the market won't continue to be strong for some time to come," he said.

"We are not seeing any indications at all that it's going to drop or level out."