Since 2007, I have read with amusement many articles published, quoting statistical anomalies, and suggesting that the residential property market is starting to heat up. Normally that stuff is published by someone wanting to get some publicity.
Well finally we have something to yell from the rooftops. The market is hot at the moment, and we have seen a real increase in property values.
Agents are blaming it on a shortage of real estate listings, but personally I think that it is actually just a symptom of renewed buyer interest. The new interest, in my view, is being driven by improving home affordability, thanks primarily to low interest rates, and a relaxing of local lending restrictions. Our opinion is that the Hawke’s Bay residential property market began showing a lift in demand around June 2015.
So, how much has the property values moved? Well let’s look at the perfect case study, from a home we have a first-hand knowledge of. This property was listed in March 2015, and took about 3-4 months to sell for $237,000. The purchaser left the property vacant, and made no changes to it. He had a change of heart and decided to sell, and within a month had secured an offer of $251,000 (with a backup offer too). This equates to about a 6% increase in property value in 4 months, which we consider to be fairly consistent with what we are seeing across both Napier and Hastings among residential properties below $350,000. For properties above $350,000 the market has also strengthened, but we would consider it more variable.