The lowering of the Official Cash Rate has sparked a "frenzy" in Tauranga's property market, a real estate boss says.
The Reserve Bank surprised the market last week by cutting the Official Cash Rate by 25 basis points to 2.25 per cent. Market expectations were for the bank to keep the rate steady. The news came ahead of new data from the Real Estate Institute of New Zealand which showed there were four more houses sold last month across the Tauranga, Mount Maunganui and Papamoa areas compared to the previous February.
Latest figures showed 174 houses sold in Tauranga last month, one more house than the previous February. In Mount Maunganui and Papamoa, there were 111 houses sold, three more than last year.
Tauranga Harcourts managing director Simon Martin said there had been an increase in activity after the rate was lowered.
"We noticed a bit of a frenzy this week after the Official Cash Rate announcement. That will keep moving the market slightly with that reduction in the rate.
"It gives people surety that interest rates aren't going to be going up soon."
Mr Martin said the figures surprised him as the company's numbers were up substantially from February 2015.
Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said people had been waiting to see what would happen with Auckland's housing market after Christmas.
"No one quite knew what was coming. A big part of our surge is from what's happening with the Auckland market."
Buyers were waiting to see if the bright-line rule, brought in last year requiring people to pay tax on income if buying and selling a house within two years, would put a dampener on the Auckland market.
"But the Auckland market is still doing its thing," Mr Purcell said. "The real estate economy has just carried through from last year really."
Eves and Bayleys Real Estate chief executive Ross Stanway said good volumes were still coming through, particularly through the auction room.
"Even last February was right up there. It looks as if we're maintaining high volumes, the big change is in price."
The figures show a rise of more than 30 per cent in prices in Tauranga, Mount Maunganui and Papamoa, although this data is easily skewed by sales of pricier properties. Mr Stanway said he was seeing sales of more properties in the $600,000 to $800,000 price range.
"The higher volumes that we're seeing are becoming quite consistent. The challenge now is getting enough stock to satisfy buyers' demand."
Real Estate Institute regional director Philip Searle said sales across the Waikato and Bay of Plenty region were buoyant in February after a slow start to 2016, with prices continuing to firm across the region.
February 2015 - February 2016 - increase
* Tauranga: 173 - 174 - 0.6 per cent
* Mount Maunganui: 108 - 111 - 2.8 per cent