Busy buyers drive house costs higher

The average asking price for a Hawke's Bay house is 18 per cent more than it was a year ago, new figures reveal.

Trade Me's Property Price Index shows the average asking price for a Hawke's Bay property during the three months to February was $381,300 - an 18.4 per cent increase on the corresponding quarter last year.

Home buyers were looking at an average asking price of $215,000 for a small house (1-2 bedrooms) in the February 2015 quarter, while the average asking price for a medium-sized house (3-4 bedrooms) was $404,650. The average asking price for a large house (5-plus bedrooms) was $663,900.

The index measured trends in the selling prices for residential property listings added to Trade Me Property by real estate agents and private sellers during the past three months.

Meanwhile, Real Estate Institute data shows 216 houses were sold in Hawke's Bay last month - an increase of 76 from January and up 22 from February last year.

Tremains Real Estate managing director Simon Tremain said greater buyer activity had driven prices up. "There seems to be a lot of first-home buyers out there getting ready for the April 1 increase in subsidy from the Government and so there's a lot of shopping around by them," he said. "I think we'll see that activity follow on through to winter."

Lower interest rates were also affecting the market, he said.

"There's certainly people getting on that bandwagon, getting into buyer mode and taking advantage of the good five-year rate and even 10-year rate."

More out-of-town buyers were also a factor, he said. "Hawke's Bay had lots of great events throughout the summer. People came to them and loved Hawke's Bay so much that they're now deciding they want to live here."

Nationally the average listed price for all property types in the three months to February bounced back to above $500,000 to $505,350 - just below a record high set last November. That was a 1.4 per cent on the three months to January and a 12.3 per cent increase year on year.

Head of Trade Me Property Nigel Jeffries said the increase was "clearly foreshadowed" in the previous couple of months.

"We've seen plenty of speculation that interest rates will be easing rather than tightening," he said. "The upshot is that the property market appears to have re-ignited.

"The trend for year-on-year price movement remains well into double figures: the 12.3 per cent increase represents a lift of over $55,000 in average asking price.

"In other words, asking prices have gone up more than $1000 every week across the country over the past year."

The average asking price for a 1-2 bedroom house in the three months to February was $337,000 (up 14.6 per cent year-on-year), while the average asking price for a 3-4 bedroom house $511,950 (up 11.6 per cent year-on-year). The price of a house with five or more bedrooms also increased - up 6.1 per cent to $871,950 on the corresponding period last year.

Most regions had rises, he said. "Looking at the year-on-year data, 13 of the 15 regions showed decent growth in average asking prices. "The only exceptions were Northland, which was sluggish and only up 0.7 per cent, and Otago which was the only region to swing into negative territory."

Real Estate Institute chief executive Colleen Milne said the surge in sales last month was partially due to fewer-than-expected sales in January.