Allison is a digital reporter for the Bay of Plenty Times

Property values highest recorded

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SKY HIGH: Peak property price reflect wide interest in working and living in Tauranga.PHOTO/FILE
SKY HIGH: Peak property price reflect wide interest in working and living in Tauranga.PHOTO/FILE

Tauranga property values have climbed to a new record, latest figures show.

The latest monthly QV House Price Index shows that average residential property values for January were up 21.8 per cent year-on-year, and have risen 8.6 per cent over the past three months alone.

The average property value was $557,313 - 15.7 per cent higher than the previous peak in 2007.

The question on everyone's lips is will that trend continue?
Greg Purcell, franchise owner of Ray White Realty Focus

Western Bay of Plenty home values were also continuing to rise, up 5.9 per cent over the past three months and 12 per cent since January 2015. Values were now 5.4 per cent higher than the previous peak of 2007. The average value in the district was $450,068.

Chief executive of Eves and Bayleys Ross Stanway said the new average value was unprecedented but there was a bigger picture.

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"These numbers indicate there is this new level of awareness of the region and interest from people who see it as an ideal place to invest, live in and work in. That's what's significant because that's what has driven the price increase," Mr Stanway said. He said the big increase in values had occurred over a relatively short period of time, about eight months.

"That's purely indicative of the increase in demand here. Demand comes from ex pats returning home, a lot of Auckland people who see career opportunities, lifestyle or family opportunities that are more attractive than where they currently are."

Mr Stanway said it would be an interesting 12 months ahead, and that there were only two things that would make the price increases level out.

"One is buyer resistance. To an extent buyers have a say in the market and that might start to firm up a bit in terms of what they are prepared to pay. Buyers will just start backing off from price increases of the extent we're looking at."

The second factor was the rate at which new stock could be added to the market, new subdivisions had been the one thing that has helped keep the rate of house prices under some control, he said.

"That supply side will be critical over the next year in terms of where the price increase tracks," Mr Stanway said.

As property values rise, Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, raised what he thought to be the "million dollar question".

"The question on everyone's lips is will that trend continue?

"It is hard to imagine that the almost exponential price increase will continue into 2016. I think last year was one out of the bag in terms of price hikes. It could continue, but who knows?"

Mr Purcell said if it did continue it might not be a good thing in the mid to long-term because salaries and the economy have not moved at commensurate levels.

"It's hardly a rock star economy - it's more of a boy band."

Tauranga Harcourts managing director Simon Martin said a levelling out of the market all depended on supply and demand and demand was still strong. He thought Tauranga had a way to go before it got the point where demand would peter out because buyers did not want to spend so much.

"If [price increases] continue like this it's going to get to a point where there's pressure on that aspect, which sounds like it might be occurring in Auckland right now, but Tauranga has a long time to go before it gets to that point. We've had very little growth since 2007, and this growth has only come in the last year," Mr Martin said.

Charli Lowes is "stoked" with the increase in value of her Papamoa home. She and her husband bought the modern four-bedroom house in December 2014 after moving to Tauranga from Auckland for the "lifestyle, affordability, and quality of living".

Now, a little over 12 months later, Mrs Lowes said the value has increased by over $85,000, according to the council and an online evaluation. "I'm happy to own a valuable asset as I'm raising a young family so it's good to know we have that security."

Mrs Lowes said the increase was great for homeowners but she felt for local families struggling to buy their first home.

- Bay of Plenty Times

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