Allison is a digital reporter for the Bay of Plenty Times

Tauranga house values soar, expectations lower

Tauranga house values continue to soar, increasing 25.7 per cent since July 2015. PHOTO/FILE
Tauranga house values continue to soar, increasing 25.7 per cent since July 2015. PHOTO/FILE

Tauranga's house prices are still rising, according to the latest QV statistics, increasing more than 25 per cent in the past year.

Real estate experts say first-home buyers are having to drop their expectations to get a foot in the door as the average house price tops $615,000.

While home values soared, Bay property asking prices decreased slightly to $527,262 according to the NZ Property Report, also released yesterday.

QV Tauranga registered valuer David Hume said first-home buyers were struggling to enter the market and there continued to be a "severe shortage" of listings and a lack of land available.

"Supply cannot keep up with demand for property and there are still a lot of desperate buyers competing to buy those homes and sections that are listed for sale on the market."

He said the trend of people relocating to Tauranga, including New Zealanders returning from overseas and people moving from Christchurch and Auckland, continued.

Chief executive of Eves and Bayleys Ross Stanway said the statistics were good news for sellers and there also appeared to be a ready buyer market to pay prices 25 per cent higher than they were a year ago.

Lowering or changing expectations had always been a factor in buying a home, Mr Stanway said.

"It's unrealistic for buyers to have visualised what their home will look like.

"The perfect home is what you can afford at a particular time," he said.

Buyers could use their first home as a base to improve equity or add value to the home, he said.

"If the family gets bigger or aspirations grow, the home can be sold and you can move to the next stage of property."

Mr Stanway said the recent statistics further cemented the pressure on the rental pool and said the recently introduced restrictions on property investors - 40 per cent deposit minimum - could have an impact.

"It will obviously affect investors planning to purchase who have less than 40 per cent. Unless they source an alternative way of financing their property they will be unable to make a purchase."

However, it was unlikely to affect investors who already had that level of equity.

Harcourts managing director Simon Martin said many first home buyers expected to buy a three-bedroom, two-bathroom- double-garaged home at a price that just was not available.

"Buyers need to be aware of what they can actually get for what they can afford."

First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said home buyers might have to "adjust their thoughts" and expectations in the Tauranga housing market.

To get into a house first home buyers would have to change some expectations - like location, especially in a market where "prices have gone up 100 grand over the last 12 to 18 months."

He said further out like Katikati or Te Puke were worth a look just to get into the property market.

"At least they are getting a property and jumping into the market which is good," Mr Jones said.

"Can't say I've heard of people disgruntled because they've had to buy a certain place. If it's that bad they tend not to buy," Mr Jones said.

The stats:

• Tauranga home values have risen 25.7 per cent in the last 12 months and 6.6 per cent in the past three months

• The average value in the city is $615,625

• Western Bay of Plenty home values have risen 24.3 per cent year on year and 5.9 per cent in past three months

• The average value in the district is $540,128.

• Nationwide home values have increased 14.1% over the past year and 6.1% over the past three months and are now 45.4% above the previous market peak of late 2007.

- QV House Price Index

- Bay of Plenty Times

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