A drop in property values in recent months has seen Tauranga plumb new depths - a stark contrast to the resurgent national property market which is scaling new peaks, according to figures released by QV yesterday.
Nationally, property values surpassed the market peak of 2007 thanks, primarily, to weak supply and strong demand in Canterbury and Auckland.
However, buyers in Tauranga had held back and that was being reflected in the 1.2 per cent drop in property values over the past three months, QV's Bay of Plenty property valuer Paul Thomas said.
"A lot of buyers are sitting and watching the market at the moment. There's still an element of cautiousness around property in Tauranga. The ones that are looking are taking their time and seeing what's out there. We are seeing many more new builds appearing, however this isn't expected to change the current activity level.
"Real estate agents are saying they're quite busy but that obviously hasn't translated into rising property values yet."
Harcourts Advantage Realty Tauranga managing director Simon Martin said the QV figures only told half the story because they were based on medium sale prices. "The fact is that in the last five months 70 per cent of the property sales were under $400,000, which means the bulk of the sales were lower-price sales."
Most of the activity in the market was taking place at the lower end, however this did not necessarily mean property values were decreasing, Mr Martin said.
Last month, 143 properties sold in Tauranga, making it the best November since 2007, according to REINZ figures. Mr Martin said sales were headed in the right direction and if they kept increasing, property values would follow.
John O'Donnell of LJ Hooker Papamoa said a recent pickup in higher-end property sales had caused him to feel confident about the future of the market.
"I'm really buoyed that the market above $500,000 is coming to life. We're finding that self-employed people and people who have got good businesses are feeling more confident and they're starting to upgrade their properties."
Mr O'Donnell said the QV figures lagged behind what was actually happening, because the figures were recorded history.
The average Tauranga property value fell to $423,865 in November, 11.8 per cent below the 2007 peak, while property values in the Western Bay rose to $401,120, 11.9 per cent below the 2007 peak, according to QV.
Meanwhile, the national property market rose 5.7 per cent over the past year to surpass the 2007 peak by 1.5 per cent.
QV.co.nz research director Jonno Ingerson said the increase in nationwide values continued to be driven primarily by Auckland and Canterbury where demand continued to outstrip supply.