Record house price rises likely to continue

BULLISH: TelferYoung valuer Trevor Kitchin says strong demand is likely underpinned by population increase. PHOTO/FILE

Hawke's Bay house prices increased 16 per cent in the year to January for a record median of $366,000 and with low numbers for sale the trend is set to continue.

Compared with December, REINZ figures show the median price rose 6 per cent to the end of January, a $21,000 gain.

Hawke's Bay had the second-lowest level of inventory in New Zealand with just under 10 weeks of supply at current sales volumes, a drop of 21 per cent over the year.

Compared with December sales volumes fell 26 per cent in January, with sales rising 6 per cent in Napier but plummeting 40 per cent in Hastings.

Black and White Mortgages broker Karrie Stephens said she saw no sign of the market slowing down, especially with Aucklanders moving to Hawke's Bay.

"There is a shortage of properties on the market for the amount of buyers - predominantly due to an influx of people from Auckland.

"We may see it plateau for a little wee while but for people that are waiting for it to drop in the next three or four months - I don't think it is going to happen."

Many of her clients from Auckland had jobs that could be performed from any location "or can have a bit of commuting because flights are so cheap".

The majority preferred Napier as their new home and many were first-home buyers using their KiwiSaver.

"People are realising they can have the best of both - they can have good incomes and job opportunities but purchase in the Bay and have simplicity, reasonable house prices and it is a great place to bring up children."

TelferYoung valuer Trevor Kitchin said continuing double-digit growth in the residential market made for "interesting times".

"I can't see it stopping, but history shows us eventually it does," he said.

"I keep hearing people have missed out on properties, some wanting to buy for two to six months but keep missing out, so when they see a property they think they'll like they make a strong offer."

Section values also increased due to "big demand".

The shortage of housing was such that it was likely underpinned by population growth, he said.

Sales were strong across all market sectors but the $800,000 to $1 million bracket "took off" in December, which he attributed to more Aucklanders relocating.

REINZ chief executive Bindi Norwell said the Hawke's Bay market was firm despite the holiday-induced January slowdown.

The national REINZ median house price rose 9.4 per cent in January year-on-year to $490,000.

January sales volume in Auckland fell 18 per cent compared with January 2016 and the median price rose 12 per cent for the same period.