$650K for the average price value of a Tauranga home

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Dan Faris and Lindsay Faris, pictured with their son Wilbur, bought their Tauranga home in June, 2015. PHOTO/ANDREW WARNER
Dan Faris and Lindsay Faris, pictured with their son Wilbur, bought their Tauranga home in June, 2015. PHOTO/ANDREW WARNER

The average Tauranga house value has risen to $651,725, up $138,000 in just a year.

The Western Bay was not far behind with a "huge" 33 per cent increase in house prices, pushing values to $596,782.

The latest QV statistics showTauranga City rose by 27 per cent compared withthe same time last year, with the average house value rising 5.9 per cent in the past three months.

However, the new loan to value ratio (LVR) restrictions aresaid to be slowing down the rapid growth across the country and pushing investors to more affordable markets such as the Western Bay, according to QV national spokeswoman Andrea Rush.

"Auckland, Tauranga and Hamilton home values are continuing to rise, just at a slightly slower pace than they were prior to the new LVR measures being introduced in late July," Ms Rush said.

The Western Bay average house value experienced the second highest rise in New Zealand in the past three months at 10.5 per cent, after Wairoa at 12.9 per cent.

QV home value Tauranga registered valuer David Hume said the housing market had seemed to improve after a slow period heading into spring.

"The frenzy that was being witnessed earlier in the year has subsided to more normal levels of activity."

Tauranga Mortgage Brokers director Tracey Robinson said the biggest challenge he had seen with increasing house values in the Bay was buyers generating a deposit for a house.

"They have to have a decent deposit and a very strong income. People who can afford those are a double income. First-home buyers struggle."

Mr Robinson said the increase in LVR to 40 per cent for investors had not affectedthe number of people buying houses.

"There was only one investor in the past six months who couldn't buy an investment because of it.

"We're still getting the same number of first-home buyers and investment buyers. I think the only people who have been deterred by the new 40 per cent LVR are the people new to investment property who would have had a 20 per cent deposit but now need 40."

He estimated the market would "definitely" slow down in the next three to five years.

"We tend to have spurts of sustained growth in Tauranga, which go seven to eight years, then something will cause a plateau."

Ross Stanway, the chief executive of Realty Group, which owns Bayleys and Eves, said the increase signalled there was "no let up" in demand for Tauranga houses.

He said the increase of the LVR restrictions would have an impact "without doubt" on investors, possibly making it easier for first-home buyers who would not have to compete with as many investors.

Mount Maunganui and Papamoa Ray White Realty Focus franchise owner Greg Purcell said previously houses around the $400-$500,000 mark were "flying out the door", but nowthe amount selling "is not what it was".

He said the large number of houses selling for between $700,000 and $900,000 were pushing the house value statistics up.

First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said they had noticed a lot more listings.

He said the upper-end house sales were "going quite well", but the middle ground between about $500,000 and $800,000 were taking longer to sell. However that was due to the higher number of listings which is usual in the spring season.

587 Maunganui Rd is listed by Ray White for $659,000. Photo/Supplied
587 Maunganui Rd is listed by Ray White for $659,000. Photo/Supplied



What does $650,000 get you in Tauranga?

-In Omanu, you can buy a three-bedroom brick house for $659,000.
-The house, which has two bathrooms and a double garage, is 180sq m on a 606sq m section.
-It is on an easy-care section with an open-plan living and dining area.

How home buyers are going, a year on

Dan and Lindsay Faris bought their Tauranga home in June, 2015, after they moved from Auckland.

Now, Mr Faris says they are lucky to be in the "privileged position" of already having entered the housing market, but he feels for his peers who are having trouble buying a house.

"We're really lucky now, the pressure is off.

"We've done relatively well," he said. "We have a lot of friends feeling a bit frustrated -suddenly they were close but it is now out of their grasp.

"Everyone is trying to be creative to get the deposit they need. Like taking smaller places and staying with parents or going in and investing with friends, it's not as straightforward as it used to be."

He said he had noticed auctions becoming a "quieter affair" than when he was looking to buy.

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