Property values have increased more than 20 per cent in every Tauranga suburb over the last year with the median value in the city's cheapest area jumping more than 103,000, new figures show.
Quarterly median value data from qv.co.nz shows home values in Tauranga and the Western Bay of Plenty are continuing to rise and formerly lower valued suburbs are maintaining recent trends in attracting attention from both first home buyers and investors.
All Tauranga suburbs have seen median value percentage gains of more than 20 per cent in the year to 30 June 2016. The top three suburbs leading the gains were Parkvale (35.5 per cent), Greerton (35.2 per cent) and Gate Pa (33.8 per cent).
Maungatapu, Harini and Judea also showed 30 per cent plus gains. In dollar terms, the data reflected yearly gains of $103,400 for Parkvale, $119,500 for Greerton, and $102,050 for Gate Pa.
At the other end of the market, Mount Maunganui properties had the smallest yearly percentage gain - of 20.5 per cent - reflecting lower supply and prices already being much higher.
"Whenever a market is doing well, the lower end tends to do even better and generally there's more demand for the lower value areas," said senior research analyst Nick Goodall.
"They're attractive to first-time buyers as well as investors, who make up a larger percentage of purchasers in any market. When there's positive feel for a market, the lower end tends to reflect it the most."
Chief executive of Eves and Bayleys Ross Stanway said buyers had seen very good value for money in those suburbs.
"A lot of activity has occurred in those areas which previously hadn't been given quite so much attention," he said. "In times like these, those suburbs start to take on a life of their own."
Harcourts Tauranga joint managing director Simon Martin said there were two drivers behind the current trends. Part of it reflected dwindling supply, which was increasing demand and putting upward pressure on prices.
"The other part is that with interest rates being so low, people can afford to pay more for their property, which also makes the median price move up."
However, Mr Martin said the firm was now seeing a slight drop in demand in response to the banks beginning to tighten loan to value ratios ahead of the 40 per cent restriction being imposed on property investors next month.
Western Bay of Plenty prices are also rising, with Te Puke seeing the biggest percentage gain of 28.5 per cent, which Mr Goodall said in part reflected a new willingness of buyers to commute.
Mr Goodall said Auckland buyers were continuing to be significant players in the Tauranga market, and made up about nine per cent of all housing buys last year, compared with about four per cent throughout 2014.
No regrets about buying in Merivale
Jena Young has no regrets about buying a house in Merivale.
Merivale, also known as Parkvale, has topped the list of a suburb-by-suburb breakdown detailing the increase in house values in the city but remains the cheapest suburb to buy in.
She and her husband bought a 1950s three-bedroom house through a private sale for about $256,000 in 2014. Since then their equity had already increased about $155,000 according to their latest rateable value, she said.
"With all the climbing prices in the market, we definitely bought at the right time," Mrs Young said.
Mrs Young said they had added a deck, changed the water heating system and installed a heat pump to help add value to the home. All this has meant they have already paid back the money loaned to them by their parents to help them buy the property.
The couple have two children. When the young family were house-hunting, they looked at other properties in the market for about the same price around different suburbs, including Mount Maunganui.
"We would have got a two-bedroom little house on a half section at the back of another property in Eversham Rd," she said.
Mrs Young said she loved what they had now, which included the potential for two extra rooms with internal access downstairs plus a back yard for the couple's two children to run around on, instead of a "90sq m square box".
The suburb has traditionally been seen as one of the less desirable places to live but Mrs Young said there was no reason for that.
"There's heaps of stigma around Merivale. I see it all the time. There's heaps of action here but there's action everywhere. But it's not like how people think,'' Mrs Young said.
"There's a community centre here, the schools is a big wrap around service, there's a nice walkway, 3.5 kilometres, down by the water's edge.
"Everyone knows everyone here. There's no trouble, unless you make it for yourself," Mrs Young said.