House sales drop as property values climb 30 per cent

By Carmen Hall

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Brent Bastin has just sold a property on a small section for $700k in Otumoetai. PHOTO/JOHN BORREN
Brent Bastin has just sold a property on a small section for $700k in Otumoetai. PHOTO/JOHN BORREN

Tauranga property values have jumped 30 per cent in two years while the number of sales has remained static compared to last year.

Data from the Real Estate Institute of New Zealand shows sale volumes in Tauranga dropped 5.6 per cent last month compared to June 2015 but volumes in Mount Maunganui and Papamoa increased 8 per cent over the same period. In total there were 289 houses sold last month compared to 290 across the same month last year.

Despite that, home values are continuing to rise. Statistics from QV reveal house values soared 32.6 per cent to $599,915 in June from $452,431 in June 2014. The Real Estate Institute also recorded an increase in values over the last year.

QV Tauranga registered valuer David Hume said the market was still "very strong in the Bay of Plenty, with new benchmarks being set on a regular basis across all sectors of the residential property market".

"The market continues to be driven by a combination of low interest rates, out of town purchasers, immigration and a general upturn in the property cycle since the declining or static values from 2008 to 2013."

REINZ regional director Phillip Searle said vendor expectations were making it more difficult for first home buyers particularly in Tauranga and Hamilton.

Demand remained strong and the supply of listings continued to fall away creating more competition, he said.

Ross Stanway, chief executive of Eves and Bayleys Real Estate said Tauranga was gaining a reputation outside the region supported by a strong economy.

"The property market is only ever a reflection of how people see the region.

''We are seeing in the results a whole new level of awareness that is available here for both lifestyle and business opportunities."

Mr Stanway said he did not think the market would slow, "if anything it will grow even more because of the competitive advantage that our region has to offer".

Ray White Realty Focus in Mount Maunganui and Papamoa owner Greg Purcell said vendors expectations had "leap frogged".

"This always happens when there is a boom and with all due respect to everyone don't get ahead of yourself. There is good money to be had out there but people go into la la land."

Feedback from agents who had done property appraisals showed people were holding back from listing primarily because they were afraid they could not find anywhere to live, he said.

"But they have got to realise they can call the shots in nominating the settlement date.

"This is a supply and demand industry and that is why prices are being pushed in some instances but it won't surprise me if listings go up in spring, which is ironic because if you want top dollar why would you put it on the market when everybody else does."

Mr Purcell said every cycle was finite. "No one knows if that is tomorrow...so now is not a silly time to be doing things".

First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said June was a record month for sales and prices.

Demand for properties had not slowed over winter he said but there was a shortage of vendors because they often looked to spring to list.

"The buyers are out there we just don't have enough listings."

ASB economist Kim Munday said the housing market remained tight and home loan lending had also lifted.

"What we have seen from the Reserve Bank publications is there has been a pick up in lending activity around the country."

In ASB's view the Reserve Bank would cut the OCR by 25bp in August.

Myvalocity managing director Carmen Vicelich said while first home buyers or young families were a large part of the market, it had seen baby boomers that were settling for their retirement.

"Couple this with a shortage of stock on the market and low interest rates and you have all the ingredients for a very strong market."

Home on small section sells for $700,000

A quaint, colonial-inspired 1950s house on a 141sq m section in Otumoetai has sold for $700,000 fetching $292,000 above its rateable value.

First National Mount Maunganui, Tauranga and Omokoroa real estate agent Brent Bastin (pictured) said the property sold to an Auckland buyer at auction via a telephone bid last month.

The 26-year-old said the property had a fabulous location and was close to the Cherrywood shopping centre with sweeping ocean views over to Mauao.

"It was also beautifully presented and, like anything else, the way you present it allows the opportunity to achieve a top price."

The three bedroom, refurbished, one bathroom house with a single garage was on a cross-leased section with an adjoining duplex.

Interest in the property was good from day one, he said and the marketing campaign included a funny video "that just worked".

No stranger to utilising social media and Facebook his short "silly films" had received thousands of hits including one were he dressed in combat gear on a mission.

He then shot a perpetrator and reported room by room footage back to his base.

"I love real estate...me and my team do things quite differently like silly Facebook videos because we have so many people externally coming to visit these houses it's a great way of marketing to a slightly different perspective.

"People are time poor now and don't have time to come through the properties everyday of the week."

He also liked to conduct an auction on site to create the emotion, he said.

- Bay of Plenty Times

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