Sales growth boosts Napier market

A surge in sales bought welcome relief to January’s sales drought in the Napier real estate market! We last saw sales at this level back in August 2013.

With sales rising to 98 in February this exceeds the ten year average sales volume of 97 (which 20% higher than the current average). Overall sales during the past year are sitting 13% less than the previous year at an average of 77 sales per month.

Spurred on by strong migration and low mortgage rates house sales are forecast to continue rising throughout 2015. The main constraints may be a lack of supply (well-priced properties for sale), and the threat of further restrictions on mortgage lending.

While the Quotable Value quarterly price index indicates that prices overall remain around 2% below the market peak (December 2007), the QV monthly index for February 2015 shows a small improvement of 1.9%.

Our empirical evidence indicates that well-presented homes, priced appropriately are continuing to attract good interest and achieve above average prices.

Buyers tend to be most attracted by three key factors: location, features and price. The indicator for the length of time to sell is most influenced by the correct pricing strategy. The average length of time to sell during the past year is sitting at 53 days, and the trend is improving. This may point to sellers having a more realistic perspective of the current market.

The Reserve Bank is almost certain to implement new mortgage lending restrictions in July, which may limit housing demand. The Bank is currently consulting on the asset class treatment of residential mortgage loans to property investors. Property investment loans are considered riskier than loans for owner-occupier properties. Under the Bank’s proposed new rule, New Zealand banks will need to hold more capital to account for their property investor risk exposure.

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]