Demand for high-value Tauranga properties is at a three-year high, a local real estate expert says.
The assessment comes as a Mt Maunganui property sold at auction for $1.94 million - nearly $250,000 over its estimated value.
Buyers from the Waikato, one an accountant and the other a dairy farmer, drove the bidding up close to $2 million at the recent auction, topping predictions of $1.7 million.
John O'Donnell, who has been principal at LJ Hooker Papamoa for more than 20 years, said the sale of the two-bedroom, two-bathroom beachfront Marine Parade home had capped a successful period.
In the past six weeks, his company had overseen the conditional sale of a $1 million-plus Oceanbeach Road, Mt Maunganui house, as well as two Papamoa properties for $760,000 and $650,000.
"There's a demand that hasn't existed for three years," said Mr O'Donnell. "There are four other real estate agents operating in the Mt Maunganui/Papamoa area where we operate and they would have achieved similar figures.
"That price range of over $600,000 has been very hard for the last two years. Ninety per cent of sales are under the $400,000 and to first-time buyers or people getting into the rental market. But we are now seeing a broadening of the market.
"People are having the confidence to upgrade their accommodation and are putting their previous homes on the market.
"That confidence has not been there for a long time and so people have simply remained where they are. Now it's back and it's a really good sign."
A realestate.co.nz search found 227 Tauranga properties currently on sale priced at $1 million and above. The most expensive was a home on a 4866sq m beachfront block in Oceanbeach Road, Mt Maunganui. It was priced at $7,900,000.
Ross Stanway, chief executive of Realty Services which operates Bayleys and Eves, agreed with the view that interest had increased for high-value properties.
"The bigger picture is that there is more interest now, it's quietly growing at the top-end of the market. There are some accepted new price levels of properties along the beachfront area especially.
"Certainly there is an increase in the number of listings which have come into the fold in recent times and it would be fair to say there is increased activity. There's a steady increase and it's a good sign.
"In some cases properties at that top end have been in the market for some time and, in the end, it's the buying market which determines what people are prepared to pay. Whether the seller accepts it or not is their prerogative."
Mount Maunganui's Marine Parade and Oceanbeach Road were recently ranked in the top five streets in New Zealand for the number of properties worth more than $1 million by property information company QV.
The streets are two of only three in the top 10 outside Auckland.
Remuera Road in Auckland has the highest number of $1 million-plus properties (319), followed closely by Marine Parade which has 296. Oceanbeach Road has 234 properties valued at more than $1 million and comes in at number five on the list.
Other areas in the Bay of Plenty remain equally popular as shown by last week's sale of Whangamata property for $3.6 million. It is believed to be a record price for the summer hotspot. The five-bedroom, four-bathroom, purpose-built holiday home was sold to an Auckland businessman.
Four beachfront properties valued at over $2 million have sold in Whangamata in the past year. Six properties in the Coromandel have sold for more than $3 million in the past five years and half of those were in Whangamata. A house on Pauanui's beachfront sold for $4 million in 2008.