Local Buyers Driving Market With Out-of-Towners Lifting Price

Friday, May 11th 2018

Duck shooting opening last weekend and thankfully it’s one of the few vices I have never been attracted to! Don’t get me wrong, I love eating duck and drinking beer but shooting guns has never been a major passion. Given the PC world we live in I am surprised that there isn’t more opposition to what is the number ONE weekend of the year for many.

April REINZ statistics have not been released as I pen this comment but based on another big month of volume of sales at Tremains and with buyers still flocking to open homes, I will be very surprised if the record median price of $445,000 is not knocked off its perch. I continually have media contacting me over the ‘huge’ amount of Auckland buyers in our market place. Out of town buyers make up approximately 20% of the sales volume so the majority of the market is driven by locals. However, it is quite often the ‘out of town’ buyer who helps lift price expectations by paying a price above previous statistical facts. The reality is no matter where you live now it is hard to get on the property ladder with 20% deposit required by banks. If you were an Aucklander and have come down to the Hawke’s Bay to buy a house at a lower level, this is achievable with a better property definitely available for lower dollars.

The problem is though you still have to come up with the 20% deposit!

We have recently employed some Aucklanders and you can understand why they would want to look at Hawke’s Bay. One of our recent employees has two young children and hops on the bus at 6.30am to arrive at work at 8am. He ‘tries’ to make the 6pm bus to be home by 7.30pm but of course that is sometimes 8.30pm, spending three hours every day on public transport and really only seeing his children in the weekends. He is on a good salary in Auckland but not much better than what he can earn here. He has a house now worth $700k (paid $500k five years ago) and will be able to find a better suburb with close proximity to everywhere and a life with his children in it. Surely more people will continue to arrive which ultimately will mean our market will continue its upward run.

While winter is typically the quieter period in real estate, I am expecting this one to be slightly different with huge buyer demand continuing and more homes coming to the market as astute vendors make the most of these ideal conditions. Data from realestate.co.nz show that more than 300 came into the Hawke’s Bay market last month with new listings up 34 per cent from April 2017 to April 2018. Whilst there is an influx of new listings, buyer demand still outweighs supply and it may just mean houses might take a little longer to sell.

In the wider world of property, this week saw the government announce that they will be investing $100 million into tackling homelessness in this month’s budget. Of that total, $37 million will go into providing 1500 shorter-term houses, which should be in place by the end of winter. The other $63 million will be used to significantly ramp up the Housing First Programme, which is a longer-term solution and targets the most vulnerable families in the country. Good to see the national problem of homelessness is being addressed by the government and hopefully we will see some of the allocated funding being used in Hawke’s Bay. There is simply no reason for people to be homeless in this country.

Locally, we are looking forward to the Hawke’s Bay Marathon this weekend, which finishes up at Sileni Winery. If you are supporting friends or family who are taking part in the

New Zealand Sotheby’s International Realty Half Marathon, make sure you head down to the ‘Half of the Half’ to cheer on your runners as they cross the half way point. There will be live music, entertainment and lots of parking.

This weekend marks the first round of winter sports with the many fields around Hawke’s Bay saturated with children doing their best for their teams. Make sure your children are out there competing, having fun outside and running around as it is key in today’s environment of devices, computer screens and television.

Have a great week.