The Napier residential property market is probably the most active we have seen for years. Reflective of this strong activity property values have risen sharply, in fact the most rapid rise in values we have seen since 2007. Values are being driven by increased buyer demand. Most buyers are locals, taking advantage of lower interest rates, strong economy and stirred on by positive media reports. Buyer deposits, from Kiwisaver withdrawals for first home buyers, are also assisting the market. Much has been made in the media about out of town investors driving the market. Our opinion is that the impact of out of town investors is relatively minor but playing some part within different sectors of the market.
The overall strength in the Hawkes Bay economy is driving up the high consumer confidence. The Horticulture, agriculture and tourism sectors are performing strongly within the region. In addition, competitive interest rates, and slight easing on the loan to value ratios requirements have assisted.
The market underwent considerable growth between 2002 and 2007, and then experienced a slight decline with the Global Financial Crisis, however recovered slightly and value levels remained relatively flat up till about May 2015. However, in more recent times we have experienced a dramatic increase in values, with regional growth being within the highest being experienced throughout New Zealand.
Over the past decade or two, market demand has increased for four bedroomed dwellings. Demand has outpaced new supply and has placed some additional value premium on four bedroom plus homes. As the household composition has changed over the years with an increase in larger blended families. Equally we are seeing an increase in demand for one and two bedroomed dwellings as people downsize. An on-flow result with number of “baby boomers” increasing demand, in addition resulting in an increased competition from more modern retirement villages and quality apartments.
Leasehold property in Napier tends to experience less market resistance within the strong market. We recommend obtaining sound valuation advice if looking to purchase a leasehold property, whether you intend to freehold it or lease it in leasehold tenure.
Investment market is performing well with the market experiencing strong growth, through both reducing yields (capitalisation rates) and rising rents.
If you are looking for a property valuer, with expertise in the Napier market, call one of our registered valuers today.