Tauranga's sizzling property market has stepped up another notch after 194 sections at The Lakes subdivision were snapped up within 48 hours of hitting the market.
"It could best be described as a buyer frenzy," Scott Adams of developer Carrus Corp told the Bay of Plenty Times Weekend.
Mr Adams said he had expected the 204 lots to go fairly quickly - the surprise was how quickly. "To sell all but 10 within 48 hours of releasing the price list is staggering."
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Sixty per cent of the lots bought last weekend went to 20 building companies, the rest to private buyers.
He was unable to say how many buyers were from Auckland except that 65 per cent of the 4000 hits on The Lakes' website last month were Aucklanders. The impact of people selling up in Auckland had been backed up by recent visits to the sales office.
The strong demand for lots continued this week. The remaining 23 sections left from the first two stages under development and the 10 unsold from last weekend's offering had all found buyers by Thursday, leaving Carrus pondering bringing forward the development programme for the other nine stages.
The sales success followed a recent report in Bay of Plenty Times Weekend that a new school was planned to open to cope with an influx of young families attracted to the surge of development involving 2450 sections in and around The Lakes.
Driving the sales success of the 204 lots on the plateau were the terms offered by Carrus. Mr Adams said buyers had the thick end of two years to settle.
Bulk earthworks, involving 500,000cu m needed to level the formerly undulating terrain had been completed and titles were expected to be issued next June. Buyers then had a further 12 months to make full settlement.
A flurry of show homes will be among the first buildings to appear on the landscape once all the roads and services are in.
Classic Builders director Matt Lagerberg said everyone was taken by surprise at the velocity of sales.
"It is phenomenal out there. The uptake is phenomenal ... we are not creating land quickly enough."
He said it indicated a shortage of titled land in the Western Bay - there was only so much developers could do in an earthworks season.
Mr Lagerberg put it down to a combination of the numbers wanting to move to Tauranga and pent-up demand.
"We are in full flight, it has caught a lot of people by surprise."
Twenty of the first 25 lots of Classic Builders' Sierra Heights subdivision next to The Lakes were under contract or had options after only two weeks.
Mr Lagerberg said people tended to prefer buying house and land packages in which they could still put a little of their own touches into the home's design.
Mr Adams said planning was under way for a convenience shopping centre at the southern end of The Lakes, with the first stage a superette, two fast food outlets and a cafe.
The Lakes had become a popular weekend destination for kayakers, dragon-boat racing, cyclists and dog walkers. Even the Bay of Plenty Steamers were training at The Lakes Oval tomorrow, he said.
A big cross-section were buying into The Lakes, with people still able to find houses in the early- to mid-$400,000s.
"There is still stock to cater for first-home buyers."
A total of 750 lots were left to build to complete The Lakes over the next five construction seasons, including the 204 lots just sold. Flat 500sq m sections were the most in demand by builders.
The latest buy-up came after a 35-lot Papamoa subdivision was snapped up in three weeks.
All the lots were sold once tenders closed after three weeks for one of the last big undeveloped blocks of land left on Papamoa Beach Rd.
The Thorne Group bought 17 of the sections in the back half of the block, with the remaining 18 buyers bucking the trend of Aucklanders cashing up and shifting to Papamoa. Nearly all were from Tauranga.
Master Builders Tauranga president Johnny Calley said the demand for sections was a reflection of low interest rates and the 10 per cent deposit needed to build a new house compared with 20 per cent to buy an existing home. The 10 per cent deposit was a big driver at the affordable end of the market.
Mr Calley, whose company Calley Homes had bought some of the 204 sections, said demand was increasing despite developers lifting the average price of sections over the last 12 months from about $190,000 to $240,000.
He expected the waiting list for lots would continue to grow as demand was unable to keep up with supply.
Builders were continuing to see a big outflow from Auckland, with people banking the surplus from the sale of their old homes.
Mr Calley did not expect the sharp decline in the price of milksolids would depress demand because the Bay's economy was driven more by horticulture, industry and the port, all of which were doing well - helped by the New Zealand dollar dropping against major international currencies.