Sales of Tauranga homes valued at $1 million or more have jumped by 93 per cent, new figures show.
Data from the Real Estate Institute of New Zealand reveals last month there were 27 sales at $1 million or above compared to 14 in April 2015.
It also shows there were 312 houses sold in Tauranga (including Papamoa and Mount Maunganui) last month, compared 247 house sales the same month last year - an increase of 26 per cent.
Homes in the $400,000 to $499,000 price band accounted for the most sales in April (at 20 per cent), in contrast to last year when homes between $300,000 to $399,000 were the most popular. The median house price in Tauranga rose to $537,500.
Greg Purcell, franchise owner of Ray White Realty Focus in Mount and Papamoa, said he had never seen the marketplace perform so strongly.
"I started in the early 1990s when it was crap, then it was good then it fell over in 98 and then it got good and fell over again. But I have never seen the acceleration we have had ... we are selling stuff in the bottom end which is nearly half a million bucks."
A million-dollar listing looked "pretty affordable" for potential buyers who had recently sold property in Auckland, he said.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said median house prices had been driven up by the number of people moving into the area and supply and demand with listings.
"If a property is well presented it sells quite rapidly as there is very strong demand."
Tauranga had benefited from an outflow from Auckland for the past 18 months and "I think that will continue".
"It's unlikely Auckland will be able to do much, or the Government for that matter, to bring house prices down, the demand from Auckland is significant."
Given the rise in property values over the past year, houses that had been worth $800,000 a year ago were now shifting towards the $1 million mark.
First National, Mount, Tauranga and Omokoroa owner Anton Jones said investors were still in the market and were buying higher value properties.
One agent fielded 100 calls about a small housing development in the first weekend it was marketed, he said.
"What is driving it more so is the investors ... it's a tough market for first-home buyers, which is a shame."
Harcourts Tauranga managing director Simon Martin said the Official Cash Rate drops meant people could afford to spend more on a property so people were buying more expensive homes. More sales in the million dollar bracket also pushed the median price up, he said.
However, Tauranga Chamber of Commerce chief executive Stan Gregec said the property market was probably growing too fast.
"We could do with a breather to allow things to settle. We don't want to become another Auckland - but that's the risk if it continues at this rate."
It was good news for the local economy in terms of stimulating activity and spending, "but not so good on other fronts".
"Yes, developments at Wairakei and Omokoroa will help, but it looks like the current rate of growth will outstrip even these."
Priority One projects manager Annie Hill said the strong real estate sales volumes were good for Tauranga and "the population growth is being matched by strong job growth, which reflects business confidence and shows that our economy is growing sustainably".
One of the issues of a rapidly expanding property market "is that house prices could increase to a degree that they are unaffordable to many of the people we would like to bring to the area," she said.
Cashing up after 54 years
After 54 years living in their Bayfair home, a couple is moving on.
Bert Taylor bought the home and section for £2600 54 years ago and lived and raised his children in it.
His second wife Nita, moved in 38 years ago. But at the end of the month they are closing the door for the last time, after selling the three-bedroom house for "high $500,000s".
The section was subdivided about 10 years ago but when Mr and Mrs Taylor decided to sell and move on to a retirement village there was no lack of interest.
The well-kept home attracted "a lot" of interest and sold within one month of being put on the market.
Mr and Mrs Taylor were happy but not surprised with the sale price, after they heard a nearby house had sold for more than $770,000 - though that home included a full section.
Mrs Taylor said their daughter came over from Australia to help them with the stress of selling a house - "it's an awful time."
Tauranga's property market was not as good as Auckland for sellers, Mrs Taylor said.
There would be a lot of people with big mortgages, Mr Taylor said.
"When's the bubble going to burst though? What goes up, must come down."
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