House Price Growth Rates In Hawke’s Bay Skyrocket Ahead Of Rest Of New Zealand
Hawke’s Bay is leading the property ‘pack’ proving a post lockdown land of milk and money, continuing to outstrip the rest of the country with the highest annual growth rate in house price values. But experts warn an overheated market is fast drying up what’s being labelled a “chronic supply shortage.”
Coastal development Paoanui Point, Pourerere Beach, Hawke’s Bay
The latest REINZ House Price Index figures reveals Gisborne/Hawke’s Bay posted a 30.7% annual growth rate increase in house prices, ahead of Manawatu/Wanganui and Wellington with a 26.0% increase.
But REINZ Chief Executive Bindi Norwell says overall, the total pool of properties available for sale in New Zealand has fallen to record lows applying pressure to house prices especially in regions like Hawke’s Bay.
“In the last three years, median prices in the Hawke’s Bay have risen from $420,000 in November 2017 now to $692,500 – a 39.4% increase. This is in part due to people shifting to the region for lifestyle reasons, but also affordability when compared with markets such as Auckland or Wellington where median prices are significantly higher.
“There has also been a significant increase in demand for properties in Hawke’s Bay and not enough supply to meet demand, therefore putting pressure on house prices.”
As a result, Central Hawke’s Bay, Napier and Wairoa are riding record rises in median property prices.
The latest REINZ property report shows median house prices in Central Hawke’s Bay for the month of January 2021 were $590,000, up from $390,000 the year before. Napier’s median house prices have risen 30.1% year-on-year to $770,000 while median house prices in Wairoa have risen to $621,000.
Bindi Norwell notes a migrational trend away from our big cities since the arrival of COVID-19 is driving provincial property prices skyward.
“Since lockdown we have seen a definite shift towards ‘lifestyle properties’. In some cases, it’s the literal definition of moving to a lifestyle property, but in other cases it’s been a move back towards having that big backyard or a deck or a pool.
“At the same time, following the arrival of COVID-19 there as been an increase in people working from home more which has opened up opportunities for people to live a little further afield and have the lifestyle with more space they’ve always dreamed of.
“What we’ve seen in the Hawke’s Bay is similar to many parts of the country. The fear of future price rises and a fear of missing out lingers deep in buyers’ minds and is impacting people’s buying behaviours. But there are still affordable properties out there for people to choose from – it might just mean living a little further out or adjusting your search criteria slightly.”
Market valuer leaders Quotable Value’s General Manager David Nagel believes Central Hawke’s Bay is both an investor’s and entry level market.
“CHB is certainly a more affordable option with the average house value $590,000 compared to just under $700,000 for each of the twin cities. But supply is limited right throughout Hawke’s Bay and is a big part of the problem that’s driving prices up.”
Over the last two years of all Central Hawke’s Bay suburbs, Otane has recorded the fastest growing house prices, at 15.96% and a median price of $494,450 while Waipawa remains the most affordable suburb with an average price of $440,800.
Kiwis upping sticks and flexing newfound abilities to work from home are also helping drive demand for coastal properties.
Cashed up Kiwis craving a slice of coastal living in Hawke’s Bay are being forced to wait it out with properties at holiday hotspot Waimarama beach selling for record prices often after highly competitive auctions and/or tenders.
One would-be buyer who wants to remain anonymous has been actively house hunting in Waimarama for over twelve months, but has disappointedly been left the underbidder at several auctions and it appears they are not alone.
According to REINZ figures for the twelve months ending December 2020, the median price for a property at Waimarama was $885,000 up from $825,000 the year before, an increase of 7.3%.
QV’s David Nagel says for vendors, it’s the perfect storm.
“We Kiwis are fascinated by the sea. We want to be near it even if we can’t see it and touch it and this is especially so in summer. Hawke’s Bay’s beaches are no different and with the crazy year we’ve just had, people are realising the fact that they don’t necessarily need to travel into the office every day. The working-from-home phenomenon has created work-life balance that boasts new choices for where we live and that certainly is helping the coastal markets.
"Coastal properties with a view, in areas such as Porongahau, Blackhead and Pourerere Beach, are selling well. I think it’s positive that people are thinking more ‘outside the box’ to get on the property ladder.”
Greenfield developments like Paoanui Point - the first of its kind underway at Pourerere beach in Hawke’s Bay are helping to bolster supply levels for coastal property hunters.
Paoanui Point developer James Bridge has reported open days for stage one of 20 coastal sections available for sale, are proving interest from those prepared to look slightly further afield, is strong.
“There’s been no shortage of enquiry from both locals and out of towners including a strong contingent of Wellingtonians looking to purchase coastal land here to build either their dream home or beach retreat.
“There’s only so much coastal farmland available in Hawke’s Bay, they’re certainly not making any more of it so people are taking up these opportunities.”