It may have taken about six years for anything to happen in the Hawke’s Bay property market, but we are now starting to see real signs that not only are the number of sales rising, but property values are too.
It is still too early to be substantiated by statistics, but our view is that the Napier, Hastings and Havelock North market in the mid price range, say $200,000 to $500,000 have experience a notable rise. And there are also indications the upper and lower price ranges are following suit.
We have seen a number of properties under contract lately, where older evidence did not support the level of the contracts, however the latest evidence did. The difference in some cases between older and newer values has been quite significant. A recent example was a property under contract for $295,000. Sales evidence over 3 to 4 months old indicated the value should have been $275,000. However very recent sales and unconditional contracts we were able to uncover indicated the contract was about right in the new market.
So is this a long term trend, or just a blip which will undo itself over the next few months? For the first time in a long time, I think we have real reason to be optimistic rising values may continue. Here is why:
- Low interest rates look here to stay for a while at least.
- We are seeing a return of investors. Poor returns on bank deposits, and low borrowing costs are encouraging more investors into the market. I think this trend will continue, despite government efforts to tax any capital gain realised within two years.
- Relaxation of low deposit lending in Hawke’s Bay has seen a return of first home buyers.
- Generally, the Hawke’s Bay economy seems to be doing better. The low NZ dollar is helping farmers in the Hastings, Central Hawke’s Bay and Wairoa Districts, plus beef prices are up. The viticultural scene has had a great year thanks to very high quality produce, and orchards generally are doing well.
- We also believe there is some catch up due, given the extended period of stagnant property values in Hawke’s Bay.
I am so confident things are on the up, that I personally started reinvesting in property, and invite you to join me. Please give one of our valuers a call, and get sound property valuation advice.