Central Hawke’s Bay is defined by its boundaries, from the base of the 200-million-year-old Ruahine Range out to the Pacific Ocean on the East Coast. State Highway 2 runs through the centre of the region, with Napier’s port and airport around 70 kilometres away. Central Hawke’s Bay (or CHB as it’s usually referred to) is also well served by rail, with a station in Waipukurau en-route for trains running from Wellington to Napier, via Palmerston North.
Waipukurau and Waipawa are the largest townships, with many other settlements dotted around the region including Elsthorpe, Tikokino, Takapau, Otane and Porangahau.
CHB’s economy is largely based around the primary production sector, with the largest contributor being agriculture, along with its related food processing facilities and supporting agribusiness. Although accounting for only five percent of Hawke’s Bay’s regional population, CHB produces 20 percent of its exports. The Takapau freezing works Ovation’s processing facility provides vital employment for CHB residents as well as the greater Hawke’s Bay population, with many employees from Hastings and Napier making the daily trek to CHB for work.
Tourism is also a big earner for CHB. Mayor Alex Walker reports more than $26 million is brought in each year through events, cycling and walking trails and beach-related activities.**
While agriculture and tourism may be prosperous, economic indicators for the 2016 calendar year show CHB was the only district in Hawke’s Bay to record a decline in the value of both consented new dwellings and new non-residential buildings.
The good news is that in general, CHB is experiencing increased capital value growth for properties. The median residential property value in Waipukurau lifted from $215,500 in April 2017 to $281,000 in June 2017.
Andrew Chambers is a registered valuer and owner of the Property InDepth franchise for Hawke’s Bay, covering CHB. He says the residential property markets in Waipukurau, Waipawa and Otane are active and steady.
“Purchasers include those trading up in property (second and third homebuyers), investors and first-time homebuyers, including those who commute to Hastings or Napier for work. The lower capital entry levels have allowed a number of first homebuyers to get their foot on the property ladder and the lower fuel costs and current interest rate environment have contributed to making the first home purchases possible. I think CHB will continue to be a steady and stable market due to affordability issues in Hastings and Napier and any slowdown will likely come from interest rate rises and upward pressure on fuel pump prices, the latter being in the spotlight at the moment,” he says.
Andrew notes there appears to be less vacant retail space in Waipukurau than there has been for some time, with commercial rents stable and the uptake of space a reflection on the improved farm-gate returns experienced for the past few years. Likewise, domestic housing rents have been stable for a number of years, with modest growth over the past 12 months.
Primary production accounts for around 95 percent of CHB’s land use. While the residential sector in New Zealand is in the spotlight at present, Andrew says the rural property market has a dynamic of its own with different drivers.
“The CHB lifestyle property market tends to mirror the residential market and has seen a lift in sales volumes and general appreciation in capital values. The sector including large farms has seen a steady number of transactions. New Zealand is at a crossroads of sorts though; with the average age of the New Zealand farmer around 65, succession plans for these properties can be somewhat difficult if ongoing family ownership is desired versus selling on the open market.
“There has been a trend to increase the size of farming operations over the past 10 to 15 years, but the capital required along with the element of ‘fairness’ in some family situations has meant that the next generation has opted out as they do not wish to carry large debt burdens. As a result, there has been an increase of company farming operations and syndicated farm ownership.”
Business Hawke’s Bay reports that there is a large area of rural land in CHB that has “untapped potential” and that the district could benefit from “increased employment opportunities”.
Andrew agrees that CHB is not thriving but holding its own.
“Waipukurau provides a vital service centre to a large farming community. There has been huge uncertainty around the Ruataniwha Water Storage Scheme (the dam). It is my personal opinion that the dam would have provided a much needed injection for CHB, but I am not sure that particular soap opera is over yet.
“If house prices in Hastings and Napier continue the current upward trend, I think you will see more first homebuyers looking more closely at the CHB towns and commuting. If the dam is ever given a green light, I envisage this would create a quick, above-average level of growth in the short term, levelling out to a moderate level of growth.”
With the dam issue now out of its hands, it’s a case of wait and see for CHB.