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Bayleys Research
MARKET OVERVIEWThe combination of scenic rural surroundings, featuring some of the country’s finest vineyards, an impressive coastline and compact urban centres including the historic Art Deco city of Napier has attracted a growing number of people to the Hawkes Bay region in recent years. The expansion of the region fuelled a sustained period of value growth within the area’s residential property market with the median value increasing from $146,000 in the March quarter of 2002 to $275,500 in the March period of 2007, an increase of nearly 89% according to sales statistics released by the Real Estate Institute of New Zealand (REINZ) Over the last year however, in line with most other regions within the country, the market has cooled as higher interest rates and falling migration have taken their toll. As a result the Hawkes Bay’s median values have plateaued remaining at $275,000 for three successive quarters during the latter part of 2007 and softening slightly early in the New Year according to provisional figures for the fist quarter of 2008.
Whilst values held steady during 2007, sales activity slowed with the number of sales recorded by REINZ falling from 3,650 in 2006 to 3,541 in 2007. The slow down is even more marked when compared with 2003, the peak of the latest property “boom”, when 4,258 properties changed hands. It should be noted however, that sales activity in 2007 was ahead of those witnessed in 2002 and therefore remain in line with the longer term trends. It is likely however that 2008 will see a continuation of the trends experienced in the latter half of 2007 with lower levels of market activity across the region with median values also easing back in the short term as evidenced by the provisional figures released for the March quarter which show the median to have slipped to $267,000.
It is also likely that prospective purchasers will take their time to make final decisions as they will no longer be under the same pressure to act quickly as they have been in the last few years and this will lead to the days on market period continuing to extend. Market trends in the region’s two largest centres of Napier and Hastings have generally followed those of the wider region. The median value has been slightly more volatile, however, ended 2007 at the same level as it had begun the year at $290,000 which is $15,000 higher than the regional figure. During the latter part of 2007 sales activity slowed with quarterly sales volumes dipping to their lowest level in the last five years. The trend looks to have carried through to the first quarter of 2008 with provisional figures reflecting a median value of approximately $280,000 and a further reduction in the number of completed transactions.
The region’s highest median values are produced in Havelock Northwhich combines the benefit of proximity to the two major centres with a village atmosphere which has proved popular with both home buyers and tourists. Particularly sought after are properties located upon elevated positions on the Havelock hills which afford them views over the Heretauga plains and Te Mata peak. In the December quarter of 2007 the median sales value stood at $430,000. While this was up on the December 2006 level of $420,000, the rate of increase has again slowed considerably being only two percent as opposed to eight percent in 2006.
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