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Houses selling out fast

Property prices in Gisborne have risen more than almost anywhere else in New Zealand over the last year, and housing inventory is the lowest in the country.

Latest statistics from the Real Estate Institute (REINZ) show the average median house price in Gisborne rose by $44,000 between December 2017 and the end of last month.

However, a reluctance of big house builders to come to the region has been pointed to as a potential problem.

REINZ regional director Neville Falconer said there was also a “gigantic decrease in sales”, with the sales count dropping 37.6 percent from the previous month.

“November’s record number of properties sold within one month created a gap in the available inventory for the Gisborne market and made the Christmas slowdown come a bit earlier than we usually see.

“This was the second month in a row that inventory numbers were down quite a bit. The region now only has five weeks available inventory (83 houses) and is the region with the lowest inventory level in New Zealand.

“There are always several reasons behind this; some seasonal influence and some relating to home owners not seeing realistic choices to motivate them to list. Inevitably the supply of new housing across the whole of the market underlies the supply of inventory.

“Gisborne has a lot to offer in terms of local amenity and lifestyle, however other factors relating to the local economy make it less appealing to bulk land development and house building companies; they are less likely to entertain more risk than they need.

“It has become slightly easier for first home owners and for investors to purchase, however the benefit from a slight easing of lending criteria is at risk of being extinguished by the effect on pricing from the forces of supply and demand.”

Mr Falconer said compared to a year ago, sales were up 15.2 percent — reflecting steady demand across the region.

Only the West Coast — up 18.4 percent — experienced a bigger percentage rise in sales over the year.

Despite the big year-on-year price rise, the region’s median house price of $338,000 failed to meet some vendors’ expectations, with Trade Me last month reporting that Gisborne sellers were asking an average of $344,650 for properties.

“Vendor’s expectations are a bit higher than we had been seeing,” Mr Falconer said.

Last month’s median price was down just 1.1 percent from November.

“The performance in the beginning of 2019 will be dependent on how many new listings we will see, as the demand doesn’t seem to be waning.”

Gisborne realtors have also noticed an influx of out-of-town buyers, putting further pressure of stock levels.

Strong out-of-town interest“There is certainly a huge amount of demand with very little stock available in the residential market,” Bayleys Gisborne’s Simon Bousfield said.

“Out-of-town interest is very strong — this has changed from investors to now families that are moving to Gisborne from out-of-region. A lot of investors are now selling rentals, which is putting pressure on availability of rental properties, with a shortage in this space.

“We are seeing the increase in activity in the region, through investment in roading, the forestry sector and growth in the horticulture sector, creating new jobs and bringing people to town — again increasing demand for both purchasing of homes and rentals.”

This morning realestate.co.nz listed 113 residential properties for sale here. Of those, 40 were listed this month (January).

BK Agency principal Bronwyn Kay said properties were selling like hot cakes over the first two weeks of January.

“Anything around $300,000 to $350,000 is in high demand. Greenwood Street was sold within 24 hours with six contracts presented and asking price was achieved. Another property on Valley Road sold after 48 hours on the market, three contracts presented, $2500 achieved above the asking.

“So there is very strong demand in January 2019.”

Gisborne’s performance was in stark contrast to the overall market, as December saw the national median price lift just 1.5 percent from $551,750 in December 2017 to $560,000 in December 2018. Gisborne was also one of just four regions to experience an increase in sales volumes — up 15.2 percent, with 53 houses sold.

SOLD IN A DAY: BK Agency sales agent Debby Cresswell at a house on Greenwood Street which sold in 24 hours. Picture by Paul Rickard