First home buyers boost market

Entry-level home buyers are driving an otherwise flat Tauranga property market, a valuer says.

But Tauranga QV valuer Paul Thomas is warning property owners not to expect any drastic changes in the market.

"Things have been starting to sell a little bit more, we haven't really seen a lot of change in values in Tauranga - we're just seeing a few more sales."

Though values had not really moved, sales prices had increased.

There were 115 properties sold in Tauranga last month at a median price of $358,250 - up nearly $30,000 on the previous month.

Mr Thomas said sales were up for entry-level properties as more first home buyers entered the market attracted by low interest rates.

However, he did not foresee any major changes in the next 12 months.

"Tauranga just doesn't have the job security or demand that other areas like Hamilton or Auckland have.

"Things are just a little bit rough."

Provincial towns in the Western Bay of Plenty were also likely to remain flat.

The QV index for September, released yesterday, shows residential property values have continued to edge higher nationally, with a shortage of listings and strong buyer demand.

House values are up 1.8 per cent over the past three months and up 5.3 per cent during the past year.

QV research director Jonno Ingerson said nationwide values had slowly increased, but the rise had to be viewed in context.

"The current value increase is also being driven largely by Auckland and Canterbury. If those two areas are excluded then values across the rest of the country have only increased by around 1.5 per cent over the past year."

While values were just above their 2007 peak, when adjusted for inflation they had dipped 12 per cent, Mr Ingerson said.

Meanwhile, the Real Estate Institute of New Zealand (REINZ) Residential Market Report for September showed a shortage of new listings had caused buyers to make rapid decisions, lifting house prices around the country.

"The traditional rush of spring listings has not eventuated this year and the market is tightening as buyers face a limited choice of offerings," REINZ chief executive Helen O'Sullivan said.

The national median house price rose by $1000 in the last month to $371,000 - up 6 per cent year-on-year and nearing the record level set in June.

There were 5653 unconditional sales nationally in September, an increase of 418 year-on-year, but a 6.3 per cent fall from August.

Massey University's Home Affordability Report - released this week - showed buying a home has become more affordable in every part of the country except Auckland.

Out of 12 regions, only Auckland has declined in affordability since August 2011.

The university's Affordability Index is calculated by comparing house prices, mortgage rates and average incomes.

It showed home affordability improved nationally by 4.9 per cent in the past year, but deteriorated 0.4 per cent in Auckland.

- Bay of Plenty Times

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