Tauranga's housing market slowing, but values still rising

Tauranga's housing market activity and demand has slowed, but home values continue to increase. PHOTO/FILE

Tauranga's housing market activity and demand has slowed, but home values continue to increase.

The latest QV statistics, released today, showed Tauranga City home values had risen 28.1 per cent in the year since September 2015, and 7.4 per cent in the last three months.

The average value of Tauranga sat at $644,297, and Western Bay of Plenty district was $574,993.

Western Bay home values had increased 29.3 per cent in the year since September 2015, and 9.2 per cent in the last three months.

QV home value Tauranga registered valuer David Hume said activity had slowed due to investor requirements of 40 per cent deposits, instead of 20 per cent.

"Investors are still adapting to the new rules and the strong demand from buyers has stopped as suddenly as a 'tap being turned off' according to some industry professionals.

"It remains to be seen how these new rules will affect the market in the long term."

He said agents reported inquiries by buyers had decreased 30 per cent, but listings were up about 20 per cent.

However inquiries from first home buyers were still high and areas such as Te Puke still had a strong buyer demand.

"These markets appear to be less impacted by the new 40 per cent deposit requirement for investors and with interest rates still low they can still get yields of up to 8.0 per cent," he said.