Hastings' average house value poised to top Napier in soaring market

New QV figures reveal that Hastings' average residential value may soon overtake Napier's. Photo / File

If houses were horses and this was a race to the $700,000 mark, then Hastings would be poised to pip Napier at the post.

The average house value in Hastings is now $699,204, a mere $274 behind Napier's $699,478, the latest QV House Price Index released on Tuesday shows.

Prices across the region, and the country, are soaring, alarming many economists and on Tuesday the Reserve Bank reintroduced further loan-to-value ration regulations requiring most investors to have a 30 per cent deposit by March and 40 per cent by May.

Local QV property consultant Nicola Waldon said at its current trajectory, it looks as though Hastings will soon overtake Napier.

"Hastings has certainly picked up in comparison to Napier. That lower end of the market has moved significantly and it's hard to find much under $500k."

Over the past 12 months the average house price in Hastings increased by 21.04 per cent and rose 8.47 per cent in three months.

In Napier, it went up 15.66 per cent in 12 months and 5.91 per cent in the three months to January.

Waldon said Hastings' gap between upper- and lower-level homes was widening.

"So some of the exceptional sales prices achieved in Havelock North, for instance, are helping to drag Hastings average up," she said.

QV general manager David Nagel said a strong local economy is also helping the cheaper end of the market, as investors and first home buyers compete.

OneRoof editor Owen Vaughan said post-lockdown, Hastings has been one of the places that has "soared".

"Hastings is definitely seen as the shiny new thing."

There are a few factors Vaughan said are influencing the growth.

Hastings was seen as a cheaper option than Napier, but this is no longer the case, he said.

Nagel said there could be a "gradual cooling of the market" in the second half of the year as loan-to-value ratio (LVR) restrictions are tightened.

"Short-term, it will likely be business as usual for the Hawke's Bay market.

"However, this slowing at the affordable end of the market will likely be replaced by value pressure in the higher-priced locations."

Nagel said with the long-term forecast for housing demand in New Zealand "looking positive, it is difficult to see the market take a significant turn for the worse any time soon".