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Bailout from Bank of Mum and Dad

By Heather Paton van der Walt

Area estate agent says parents in Hawke’s Bay are becoming unwitting property investors in a desperate bid to keep a roof over their kids’ heads. Real Estate Institute of NZ figures show median house prices in Napier rose to a record $810,000 in April. Hastings District’s April median was $715,000, Central Hawke’s Bay’s $550,000 and Wairoa’s $350,000.

Overall house prices in the region were up 17.6 per cent year on year, to $770,500.

Hawke’s Bay REINZ spokeswoman and Ray White Hawke’s Bay managing director Elanor MacDonald said, in the past few months, agents were noticing new investors – mums and dads of adult children.

MacDonald said the region’s dire rental situation had forced the parents’ hands – their children had been forced out of rentals that had been sold and after struggling to find alternative accommodation, were facing the possibility of living in motels.

“These weren’t people who were even remotely considering becoming investors – it’s more of a necessity to house their family,” MacDonald said.

She said they had particularly seen it in families with children wanting a “security of tenure” to ensure stability for children so they won’t have to shift schools.

“I can see more of this thing going down potentially – it could become a bit of a trend.”

The record high in prices was largely because of the number of sales in the higher-end market and few properties for sale at the lower end, she said.

There is a higher supply of the higher-priced houses, but even then “it’s still short” and there is a general supply shortage.

Whether the number rises or not depends on what the investors of the properties on the lower end of the scale will do.

“If they decide to sit on them then I suspect that it will probably go up or actually stay the same. If there’s a sudden rush of investors wanting to sell off these cheaper units and things, then in fact it might reduce somewhat next month.”

But they haven’t seen a rush of investors coming to the market to sell, she said. There is also an increasing trend of people from outside Hawke’s Bay buying and shifting to the region for work, she said.

Property Brokers regional manager Joe Snee said there is the continuing issue of supply not meeting housing demand.

He thinks supply will start to lift, but the demand will remain high.

There were a larger number of higher-priced houses as well as some first-home buyer houses, but not as many in the mid-range, he said.

For the last six months or so there had been fewer sales but there are more million-dollar homes selling than previously, pushing up the median price.

Snee said he hadn’t seen new parent investors buying houses for their renting children to live in but has seen baby boomer age investors.

There were 209 houses sold in Hawke’s Bay in April, down from 255 in March.

  • – Shannon Johnstone, CHB Mail.
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