Boom continues in house market

Interest in Hawke's Bay properties continues to boom.

The "pedal is down" as the Hawke's Bay real estate market accelerates, with price and volume increasing strongly in October, according to REINZ figures.

The median price rose from $279,000 in September to $304,500. In October last year it was $290,000.

The region saw a 52 per cent increase in numbers sold in October last year - from 191 to 290. In September 263 sold.

Tremain Real Estate managing director Simon Tremain said history was repeating itself.

"I'm excited by those figures - we are starting to see the median reach the previous record of $305,000 and those monthly volumes are getting close to the magic 300 mark," he said.

"When we were back in the boom from 2001 to 2006 the market was regularly having sales volumes over 300.

"There is plenty of demand out there and plenty of buyers - that median price increase just had to happen."

He said the upward trend would continue.

"The pedal is down and the buyers are out there."

Buyers were from throughout New Zealand, many moving to Hawke's Bay as its economy grew while other regions' shrunk.

He said 25 per cent of his company's sales were to out-of-towners in all price brackets.

Property Brokers Hawke's Bay manager Paul Whitaker said higher volume and prices "will be the new norm".

"Prices are lifting across the board - especially in the investment market in the cheaper areas due to out-of-town-buyers from Auckland.

Strong price growth was seen in Havelock North, Taradale and Greenmeadows on the west side of Kennedy Rd, he said.

Leaders managing director Elanor MacDonald said the earlier buyer focus had widened from the lower end of the market, which had affected the median price in previous months.

Staff were "flat out" and experiencing multiple offers on 80 per cent of properties.

"Some are having five offers or more," she said.

"I haven't seen that level of interest in the 20 years I've been involved in the Hawke's Bay market.

"There are still not enough houses for sale and for every house that comes on the market one goes off."

Andrew White of My Valuer said after six months of uncertainty the market was in growth mode.

"Whilst the market ebbed and flowed, experiencing attrition when reserve bank intervention slowed the market - and small ups by way of the natural cycle - the market is now seeing a continual upside and in some areas a significant correction in prices is occurring," he said.

"The key factors at play are not dissimilar to the start of the boom in the early 2000s. The Auckland region has been experiencing a booming property market for over two years now and New Zealand as a whole has, year to date, seen net migration rise to 60,000.

"The regions are benefiting from an increase in internal migration out of Auckland. Who wouldn't sell and move to Hawke's Bay when you have seen your property nearly double in value?

"I think Hawke's Bay has had the lid lifted a little bit, and we are seeing a correction in price and sales volumes, possibly back to normal levels where there is a natural propping-up of the market by all levels of buyers."