Home sales up but not values

By Joseph Aldridge

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Tauranga house sales continue to rise but are not yet strong enough to push property values up, real estate agents say.

The number of houses sold in Tauranga last month was 125, an 8.7 per cent increase on January and a 6.8 per cent increase on February last year, latest Real Estate Institute of New Zealand figures show.

Mount Maunganui and Papamoa saw a huge 77 per cent increase in the number of sales, however this was largely due to a slow month in January. Sales along the coastal strip were actually down 5 per cent when compared to February last year.

Sales in the Western Bay of Plenty saw a 53 per cent increase from January and a 40 per cent increase from February 2012.

The number of sales in Tauranga had shown consistent growth over recent months, but was not yet at a level to push prices up, LJ Hooker Tauranga principal Neville Falconer told the Bay of Plenty Times.

"The supply of land in Tauranga is strong, we're not short of land here. In addition, there's a very competitive building market here in Tauranga and so the likelihood of prices to be driven upwards purely on a supply-demand basis isn't really very high.

"For prices to start to be pushed up we'd expect to see at least another 40 sales a month quite regularly."

While February's median prices had increased on January - up 12 per cent in Tauranga, 11 per cent in the Mount and Papamoa, and 7 per cent in the Western Bay - this was more a reflection of buyer behaviour than an indication values were going up, Mr Falconer said.

"It's where the strength of the market is situated and that's pulling the median with it.

"There will be some degree of influence on prices but it's not able to be used as an indicator for the direction of prices to any accurate level."

Harcourts Advantage Realty Bay of Plenty managing director Simon Martin agreed but said the continued increase in sales volumes was encouraging.

"It seems that there's more confidence in the marketplace and we've got areas around us performing well, so it's going to flow into this town over the next wee while."

The 77 per cent increase in sales numbers at Mount Maunganui and Papamoa had largely been a result of a slow January month for the area, he said. Ninety-four houses sold in the area in February, compared with 53 in January and 99 in February last year.

"It was interesting, the Mount and Papamoa market was a bit slower over January ... it might have been that some of the local people left the town in January and the holiday-makers came in, so the real-estate transactions weren't conducted until later in January, which flowed over into February."

Greg Purcell, franchise owner of Ray White Realty Focus Mount Maunganui/Papamoa, said it was difficult to explain why January sales in the area were slow and February sales strong.

"A month is a small increment of time to judge a market."

By the numbers

Median prices in February

  • Western Bay of Plenty: $387,000, a 7 per cent increase on January

  • Mount Maunganui/Papamoa: $432,000, an 11.5 per cent increase on January

  • Tauranga: $360,000, a 12.5 per cent increase on January

  • Waikato/BOP: $324,000, a 3.8 per cent increase on January

  • New Zealand: $382,000, a 3.2 per cent increase on January

- Bay of Plenty Times

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