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Tauranga property market continues to soar

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House values in Tauranga continue to soar, with the average home now worth nearly $600,000. Photo/file
House values in Tauranga continue to soar, with the average home now worth nearly $600,000. Photo/file

Home values in Tauranga rose more than 23 per cent last month, putting the average property value in the city at just a few dollars shy of $600,000.

The latest QV figures released yesterday showed the average value in Tauranga rose 23.65 per cent in June compared to the same time the year before, bringing the average value to $599,915.

The percentage increase was the fourth highest in the country, outstripping most of Auckland. Only Hamilton, Queenstown Lakes and Counties Manukau north-west saw larger increases.

In the Western Bay, home values also rose rapidly, up by 20.9 per cent since June last year, bringing the average value in the district to $526,756.

Eves and Bayleys Real Estate chief executive Ross Stanway said the price increases Tauranga and Mount Maunganui had been seeing were now spreading to the Western Bay and Rotorua, showing just how much demand there was.

Mr Stanway said his company had more stock in the market this winter than it did last winter but it still was not enough.

"The demand is there and there's a shortage of stock and people are competing pretty vigorously," he said.

That competition was pushing prices up and meant houses in most price ranges were selling rapidly.

Mr Stanway said there remained a large number of Auckland buyers but more recently he had noticed parents buying properties on behalf of their adult children, many of whom were overseas but planned to return in the future.

In some cases, parents were helping because young people were struggling to come up with the money on their own but in other instances parents were making the decision to buy now to make sure their children weren't priced out when they returned from overseas.

Mr Stanway said he had not seen a "let up" in the level of demand and did not expect to while interest rates remained low and interest in the Bay remained high.

The highest volume of sales were in the $500,000 to $750,000 range but there had been more sales in the top end as the value of properties increased.

Tauranga Harcourts managing director Simon Martin agreed it was the lack of supply and high demand pushing values up but said the market seemed more stable than in the 2003 boom.

In 2003, there was more speculation from investors buying and selling for a quick return while the current trend seemed to be people buying to move in or as long-term investments.

"It's a more solid sort of market. It's not going to be as fickle. It won't have the boom/bust sort of thing with people buying and flicking them on," he said.

There remained a large number of people moving to town which created demand for other skilled professionals which drew more people to the region, he said.

Mr Martin agreed there did not seem to be any signs of the market slowing.

The bulk of sales remained in the $500,000 to $700,000 bracket but he said there were still properties in the $400,000 range.

"There's a few in the threes, not many in the twos these days," he said.

Franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa Greg Purcell described the current trend as a "wind that keeps blowing".

There was a lot of uncertainty around the world with Brexit and the Australian and American elections but that seemed to be working in New Zealand's favour as well, he said.

"There is the possibility that all this uncertainty could be quite favourable for us because where do you want to live?"

He said there was a lack of listings and people seemed reluctant to sell for fear of not being able to find anywhere else to live.

- Bay of Plenty Times

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