The Hawke's Bay median house price is up 20.1 per cent on August 2019. Photo / Warren Buckland
First-home buyers are being locked out of Hawke's Bay's housing market as the region's house prices soar after lockdown.
Median house prices in the region in August were up 20.1 per cent on the same time last year according to statistics by the Real Estate Institute of NZ.
It's the second-highest jump of any region in NZ, just 0.2 per cent behind Southland, and is being caused by huge demand for homes, real estate agents say.
The region's median price now sits at $595,000 - Napier's median is now $615k up from $551k, Hastings $600k up from $468k, Central Hawke's Bay $425k up from $393k and Wairoa $268k up on $155k.
Five years ago the median house price in the region was $290k.
A combination of low interest rates, the Government's removal of loan-to-value ratios and a lack of listings after lockdown is creating problems for first-home buyers and even retirees, Tremains central region general manager Stuart Christensen said.
Christensen said auctions are being held outside so people can social distance under level 2 as they reach high numbers, such as an auction on The Esplanade in Westshore drawing a crowd of between 60 and 70 people.
Property Brokers regional manager Joe Snee said the demand is outstripping supply with a "record low" supply of houses for sale coming into spring.
Snee said in Hastings on Wednesday there were 98 properties for sale and at the same time last year, there would have been about 240.
Many Hawke's Bay properties are receiving more than 10 offers and not many are selling with just one offer, something that was not common five years ago, he said.
Snee said an agent had 60 groups attend a property's first open home, 40 attend the second and 30 still coming to the third open home.
OneRoof editor Owen Vaughan said recent sale figures show the Hawke's Bay's housing market has been the best in NZ at "shrugging off the return of Covid-19".
"OneRoof's own Covid Index, which has tracked changes in the housing market since March 24, has found that property values nationwide are up 1.9 per cent in the five months to the end of August.
"The best-performing regions on the index were Hawke's Bay and Canterbury - both up 3.7 per cent."
Director of valuation at OneRoof's data partner Valocity, which developed the index, James Wilson said, "whilst still early days, it appears that the 'pent-up demand' effect is here for the longer term.
"Confidence in the housing market, especially among first-home buyers and investors, remains strong, supported by low interest rates and talk of further cuts in the official cash rate.
"However, it is important to note that sales volumes are still significantly down on previous years."
Speaking to Hawke's Bay Today, Finance Minister Grant Robertson said keeping house prices affordable is a "massive challenge" for the next government.
Changes to the demand of housing such as the Government's foreign buyer ban; increasing the bright-line test which means you can't flip and sell a home which isn't a family home within five years without paying tax; and ring-fencing rental losses would help.
"The impact of those policies will now be felt over the next couple of years."
He also said lower inward migration over the next couple of years would be a factor that could slow the market.
BIG STRUGGLES FOR FIRST-HOME BUYERS
A 28-year-old Hastings man says he and his pregnant wife have been looking for their first home in Hawke's Bay since lockdown lifted.
They have a budget of between $400,000 and $450,000 and have found it difficult to find many houses in Hastings in that range that don't need costly renovations.
When they have found properties that fit their budget, they have been outbid by investors offering higher prices.
"Every open home in my range is getting at least three or four other offers," the man, who did not want to be named, said.
The young family is currently renting but as their rent continues to increase and they have a baby on the way, they want their own home.
He said looking further out in Central Hawke's Bay has been suggested, but they have family, friends and work in Hastings where they have lived for about five years.