House values jump 27.8 per cent

Aerial view of the Western Heights suburb of Rotorua. 5 May 2016 Rotorua Daily Post Photograph by Ben Fraser RGP 30May16 - HARD TO FIND: Finding a rental in Rotorua is proving tough going for

Some in Rotorua are hesitating to put their homes on the market because of worries they won't be able to secure a new property, according to local agents.

And that's not helping a shortage of stock - with more buyers than homes on the market.

The latest QV House Price Index for April released today showed the average value of a home in Rotorua has jumped 27.8 per cent in the past 12 months, to $396,423.

Values have increased 4.4 per cent over the past three months and now sit 35 per cent above the 2007 market peak.

Registered valuer Michael Power said the 12-month percentage change was similar to the March and February 2017 figures indicating a "levelling off in growth".

"The average sale price for April was slightly up at $396,423 compared to $391,910 in March which may be reflecting some stronger sales in the higher price brackets.

"Although the latest loan to value ratio restrictions have cooled the investment market, there is generally still good demand for most residential properties."

Mr Power said the shortage of sections in Rotorua had resulted in some people choosing to buy existing properties instead of building.

"But the development of a new stage of the Baxendale subdivision will see the auctioning of 24 sections later this month."

Professionals McDowell Real Estate co-owner Steve Lovegrove said new listings coming onto the Rotorua market were "only just sustaining the demand".

"Buyer sentiment is a bit more conservative. Those looking at a transitional move may hesitate because there is doubt of what they will be able to move on to.

"We have more people than we have houses here and that continues to drive price pressures. The demand is still there so until we see a dynamic change in new stock, it will continue."

Mr Lovegrove said those benefiting most from the current Rotorua market were homeowners sitting on their properties.

"Those not looking to buy or sell are enjoying the increased equity of wealth as their properties' values rise."

LJ Hooker Rotorua director and principal Malcolm Forsyth said there was still good demand, but the lack of stock was a cause for concern.

"Some are hesitating to put their homes on the market because while it is almost a certainty the house will sell, the question becomes, 'what are we going to buy?'"

Mr Forsyth while there was still good activity on the market and houses were still seeing multiple offers, the rate of price rise was slowing.

"We are seeing a little caution coming in which is a good thing - you don't want to see a market gallop away from you.

"The shortage of properties is fuelling the demand. Rotorua is still playing catch up but we are starting to see the values slow down."

Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said the figures were not surprising.

"There is good demand but at the same time there is a shortage of good listings coming through.

"The average value in Rotorua is still achievable for a lot of people but Rotorua, like regions right across the market, is levelling out."

Mr Anderson echoed other agents, saying buyers were hesitating putting their property on the market until they had another place to go into.

QV House Price Index: April
- Average value up 27.8 per cent on April 2016
- Average value sitting at $396,423.
- Increase of 4.4 per cent over the past three months
- Sitting 35 per cent above 2007 market peak