The average house in Napier city is now valued at $798,075, down 9.5 per cent on a year ago. Photo / Warren Buckland
The average house in Napier city is now valued at $798,075, down 9.5 per cent on a year ago. Photo / Warren Buckland
House values fell close to 10 per cent in Napier over the past year, one of the biggest market dropoffs in regional New Zealand, new data shows.
Hastings and more rural parts of the region also felt the squeeze, which has been driven by rising interest rates and economic uncertainty, though Wairoa house values bucked the trend by increasing (albeit by less than 1 per cent).
CoreLogic’s House Price Index (HPI) for 2022, released on Thursday, shows property values were down 5 per cent nationally over the calendar year, leaving the average house price at $956,000 in December.
The average house in Napier city was valued at $798,075, down 9.5 per cent on a year ago. Hastings District ($806,033) was down 8.4 per cent for the year.
Tararua also recorded a 5.8 per cent drop for the year, while Central Hawke’s Bay recorded an annual drop of 4.2 per cent, all of which came in the final three months of the year.
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Tremain Real Estate general manager Stuart Christensen said sellers in Hawke’s Bay were now having to accept lower offers from buyers, or risk their properties sitting on the market for months.
“If you’re trying to sell your house in this market you can definitely still do it, but you have be realistic, and come in with an open mind.
“There’s plenty of choice out there at the moment, particularly for buyers, and we’re just not seeing the interest that we once did.
“If you get two or three people to an open home you’re doing really well - that’s the reality at the moment.”
Christensen said the investor market had dried up almost completely in the region, but first-home buyers were not taking their place in large numbers.
“They’re out there for sure, but their enthusiasm for buying, it’s not at the same level as what I’ve seen described in national media.”
For comparable regional markets, Napier and Hastings recorded the second and fourth-largest falls respectively, with Palmerston North (down 12.1 per cent) and Whanganui (down 8.5 per cent) sitting above and between them.
Two major urban centres, Wellington (down 16.9 per cent) and Dunedin (down 9.5 per cent) also recorded large falls.
Stuart Christensen has noticed the downturn in Hawke's Bay's property market. Photo / Supplied
CoreLogic NZ Head of Research Nick Goodall said it was a significant turnaround for the entire New Zealand market, which had grown by 27.6 per cent in 2021.
December marked the largest national annual decline since June 2009 (-6.4 per cent), when the market was still in retreat from the Global Financial Crisis, but the market wasn’t at the bottom of its downturn yet, Goodall said.
“Particularly given the outlook for further rate increases in the first half of this year.
“This will restrict borrowing capacity and until rates stabilise we should be prepared to see further declines in value this year.”
During Covid-19 lockdown and the first waves of the pandemic, New Zealand recorded a national increase in average house prices of 41 per cent over the 19 months from trough (August 2020) to peak (March 2022).
Christensen said rising interest rates had yet to bring about any signs of “panic” among Hawke’s Bay sellers, but this could occur in 2023 as people moved on to new fixed-term mortgage rates.
“Once homeowners start coming off their 2.5 per cent rates and onto their new 6.5 per cent rates you might see a few signs of that.”
He said there was still potential for a traditional post-holiday surge in the market, but it would follow more regular patterns, with a winter slowdown likely, followed by a spring uptake.
