Bay of Plenty house sale volumes down, but median price rises

Lending restrictions and fewer houses on the market have affected sales volumes according to Tauranga Harcourts managing director Simon Martin. PHOTO/FILE

House sale volumes have dropped in both Mount Maunganui/Papamoa and Tauranga according to REINZ data, but the region's median house price has risen.

The September residential real estate data for Mount Maunganui/Papamoa shows a drop in sales volumes year on year from 141 in September 2015, to 98 a year later. In Tauranga the figures were 150 in September 2016 down from 161 in September last year.

The median price across the whole Waikato/Bay of Plenty region reached a record high of $458,500, up $68,500 on September 2015. In Mount Maunganui/Papamoa the median house price for September was $657,500, up from $582,000 12 months earlier, and in Tauranga $553,000, up from $472,500 in September last year.

REINZ regional director Philip Searle said investor activity had continued to decline since the announcement of new Loan to Value Ratio (LVR) restrictions.

Despite this, underlying first home buyer demand remained solid across the region, he said.

Mr Searle said section sales were rising, indicating an increasing preference for new builds in the face of the LVR restrictions.

Tauranga Harcourts managing director Simon Martin said for the first four months of the year, each month had outperformed the same month the previous year in sales volumes.

''But for the last five months of the year so far, every month has underperformed in terms of volume over the same month last year.''

He said LVR restrictions have put off some buyers and there has been a reduction in the number of houses on the market.

''People are coming to us and saying 'we don't have enough deposit, so we are out of the market,' so there is a decrease in demand.

''There has also been a supply issue with fewer listings on the market. However, that is correcting itself and since July this year there has been a 30 per cent increase in stock in the Tauranga area.''

Spring is traditionally a time when there is an increase in the number of people putting their houses on the market.

''Stock levels have increased and the volume of sales has increased, but probably not to the extent that it should have because a chunk of the buyers have moved out of the market.''

Mr Martin said LVR restrictions were likely to have contributed to the increase in median house prices and that the same thing happened the last time LVR restrictions were put in place.

''The people buying the cheaper properties left the market, so the ones who were selling were the $500-600,000 houses and all of a sudden there was a massive increase in the median price and everyone said house prices had gone up. But in that situation they hadn't. That was a couple of years ago when they did it and the market was pretty flat.''

Low interest rates can also affect median house prices as people can generally afford to pay more for a property, he said.

Mr Martin said property sales in the $600,000 - $800,000 bracket were still pretty strong and that had also pushed up the median price.

Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said in the Mount Maunganui and Papamoa areas, the top end of the market has been quite popular.

''The [median] house price going up is probably because the top end has had quite a good run lately and that skews things a bit."

But the middle of the market had slowed in the last four to six weeks in both the Mount and Papamoa, after running ''red hot'' for around 12 months.

''I'm not saying it won't come again, but it's definitely taken a breather.''

The Auckland market has shown a similar winter break.

''Auckland is still the driver and the Auckland market has affected this. There used to be a six-month lag between [what happened in] Auckland and [what happened in] Tauranga. Now it's almost in real time,'' said Mr Purcell.

Eves and Bayleys Real Estate chief executive Ross Stanway said the figures were consistent with the way the market has been moving.

''The rate of price increase has probably slowed a bit. The median, of course, can be influenced fairly significantly by the volume of sales appearing in a particular price band.

''If a number of sales of property in that upper quartile have occurred then that will be pushing up the median and volumes would be back a bit, but I think that can change pretty quickly as we head into better weather.''

Median house prices:
Tauranga: September 2016 - $553,000; September 2015 - $472,000
Mount/Papamoa: September 2016 - $657,500; September 2015 - $582,000
Sales volume:
Tauranga: September 2016 - 150; September 2015 - 161
Mount/Papamoa: September 2016 - 98; September 2015 - 141