Record house prices in Hawke's Bay 'an early Christmas present' for property owners

GOING UP: Tremains Real Estate managing director Simon Tremain says strong real estate price growth is across all market sectors. PHOTO/PAUL TAYLOR

Hawke's Bay houses have a record median price according to REINZ figures for November.

Tremains Real Estate managing director Simon Tremain said the 15 per cent increase on 2015 was "an early Christmas present " for property owners.

The $345,000 median price follows extended activity concentrated in the lower part of the market, which Property Brokers Hawke's Bay manager Paul Whitaker said masked strong price growth at all price levels.

He said the Reserve Bank's rule since September, that property investors needed a 40 per cent deposit, had stymied investor activity but the market remained "very strong".

With fewer investors active the median price was now more reflective of the market.

Mr Tremain said most investors were from outside the region "because they see good value with a reasonable return - the rents have gone up significantly".

He said the high end of the market - houses priced more than $800,000 - had moved significantly.

November was the strongest month this year so far with 299 sales. For November 2015 there were 263.

The best month in 2006 was 409 sales for November and Mr Tremain said he was confident the 400 mark would be breached in 2017.

"The market still has plenty of grunt left in it," he said.

Fears that Auckland might lead a market downturn nationally were unfounded because Auckland would continue to experience strong population growth.

Mr Tremain said the high end of the Hawke's Bay market - houses for more than $800,000 - had moved significantly with many buyers who were new to the region fuelling the median price rise.

"It is an early Christmas present for the people of Hawke's Bay because most people own a house and those median prices have moved $70,000, about 30 per cent in just over 12 months."

Valuer Andrew White of My Valuer said the market was strong, with the record $114 million worth of property sold in November a 35 per cent increase on the November 2015 total.

He said strong internal migration was a driver, as was a rise in building costs.

Austins Real Estate realtor and auctioneer Tina Chamberlain said the market had plenty of steam, despite a lack of new listings. The lack meant some sales did not go through because the seller could not find a replacement home.

"People want to sell but there is nothing for them to buy - there are not enough [homes] on the market," she said.

"Listings are slower in coming to the market and that is pushing the price."

It was a seller's market, Ms Chamberlain said.

"We are definitely still seeing a lot of multiple offers happening on properties. This is where I totally believe vendors should take their homes to auction so they can get true market value.

"How else will the vendor know they have actually got the best price?

The auction process also reassured buyers they weren't paying too much "because 30 seconds ago someone was willing to pay $5000 less".

Mr Whitaker said the market was starting to peak "although there are still some exceptional sales out there".

He said next year brought uncertainty to the broader economic landscape thanks to continuing earthquake rebuilding/insurance costs, Donald Trump as the United States President-elect, Brexit fallout and rising interest rates.

"I expect to see good activity leading into autumn so if anyone is thinking of selling they should be taking advantage of the current market conditions rather than leaving it to chance."