Number of $1 million suburban houses doubling

While million-dollar-plus houses with the opulence of the pictured for sale with Ray White-listed Napier house are rare, the price bracket is increasing in Hawke's Bay. Photo/Supplied

Hawke's Bay suburban house sales of more than $1 million have doubled according to the latest REINZ figures.

For the first half of this year there was a record 30 sales in the top bracket compared with 15 for the same period last year.

Three years ago investors were dragged down by the median price in Hawke's Bay active at the lower end of the market. Many houses were cheap enough for rent levels to cover mortgage payments.

New Zealand Sotheby's International managing director Fraser Holland said there were two main factors behind growth of seven-figure sales over the year.

"We are seeing a large number of out-of-region purchasers looking to buy in Hawke's Bay," he said.

"They tend to buy more at the top end, rather than the middle or bottom.

"Secondly, we have had capital gain growth of circa 25 per cent annually so a lot of the properties that were $900,000 properties are now more than $1m plus."

A significant Sotheby's sale this year was a Bluff Hill house "beautifully constructed with significant views to the Cape", which sold for $2m despite having just three bedrooms.

He said $1m was a psychological barrier five years ago, now replaced by the $1.25m mark.

"Once you are spending above that level people are starting to squirm a little bit."

Property Brokers Hawke's Bay manager Paul Whitaker said properties worth $700,000 2.5 years ago were now worth more than $1m.

"It is a natural progression - the market growth applied to a wide spectrum of properties."

He said it appeared Hawke's Bay people appeared no longer to be main market protagonists.

"The main transactions at the moment are people buying investment properties, people getting rid of investment properties to first-home buyers or other investors, or sales to people from outside of the region. The actual transactions of houses for local people is probably way down. I have no figures on that, but we are seeing it as a massive trend."

Locals were withdrawing from the market "because they don't perceive there is anything to buy - they are just sitting tight".

Tremain Real Estate managing director Simon Tremain said the lifestyle property sector in Hawke's Bay was enjoying a similar price boost to top-end suburban sales.

Nationally the number of suburban properties sold around the country for more than $1m during the first half of 2017 decreased by 4 per cent when compared with 2016.

In the Auckland market, the number fell by 8 per cent for the period. Excluding Auckland the national figure was 16 per cent for the six months.

REINZ chief executive Bindi Norwell said the top end of the market was starting to see signs of stabilisation. She said Reserve Bank deposit restrictions were continuing to impact on people's ability to purchase property rising interest rate predictions were stymying cheque book signatures.

"When you look at the Auckland picture, the first half of 2017 saw the lowest number of million-dollar-plus properties sold in Auckland since the second half of 2014 - a clear nod to the stabilisation of property prices in New Zealand's biggest city. However, most regions saw the top end of the market grow, highlighting the buoyancy we're experiencing around the country."