Seasonal slump, ahead of rise
Affected by the holiday period, the volumes of sales in Napier slumped to 66 in January 2015. Taking into account seasonal factors the average monthly sales during the past year has been 76 – 15% below the previous year’s average of 94, and 19% below the 10 year average. Sluggish turnover appears to be the greatest market constraint in Napier, as the effects of the Reserve Bank loan-to-value restrictions continue.
Although the median price fluctuates from month to month (depending on the number of sales occurring in particular price bands) the Quotable Value price index indicates that prices improved by a small margin of 1.1%.
Looking more closely at the data the number of sales below $300,000 is down a massive 30% compared to the previous year. This is the sector appealing most to first home buyers and investors who, in spite of favourable interest rates, have been less active because of LVR constraints.
Turnover between $300,000 and $500,000 are down 12%, while the number of sales above $500,000 has improved 4% over the prior 12 months. In the higher price sector, price expectations for many sellers have had to be pared back in order to sell.
Well-presented, correctly priced homes in good localities continue to attract strong buyer interest and achieve good prices relatively quickly. Whereas homes that do not meet one or more of these criteria usually require an adjustment in price to narrow the gap to buyer expectations. Unfortunately some home sellers still don’t understand the damaging effect that over pricing can have on the final selling price.
Compared to January 2014 the number of days to sell improved by nine days. Over the past 10 years the median number of days to sell for the Hawkes Bay region in January has been 56 days.
Apart from the LVR constraints, mortgage lending conditions are expected to remain favourable which is likely to support growth in house sales over the year ahead. Although growth is likely to be uneven across the country due to shrinking export revenues reducing incomes for provincially based buyers. The migration surge is pumping up the urban populations, and sales activity in Auckland and Canterbury.
If you want more detailed information and analysis of the Napier Real Estate Market please contact Malcolm Cox, on (06) 835-4321 or email: [email protected]
