CoreLogic data shows Tauranga properties made a median resale profit of $323,000 in Q4 of 2020. Photo / File
CoreLogic data shows Tauranga properties made a median resale profit of $323,000 in Q4 of 2020. Photo / File
Tauranga's hot property market has seen some homeowners gain a whopping resale profit of between $850,000 and $945,000 in just two or three years, new figures show.
However, local real estate agents warn not all properties make massive resale gains and any profits made need to be balanced against buyingand selling into the same market where limited stock is available.
CoreLogic New Zealand's latest Pain and Gain Report revealed Tauranga residents who sold their home in the last quarter of 2020 made a median profit of $323,000 per property.
The city's gross profit from resales between October 1 and December 31 was $78,097,327.
The median for Tauranga properties sold at a loss was $5000, with a gross loss of $10,000.
CoreLogic's senior property economist Kelvin Davidson said the national trend of strong property gain and minimal pain was replicated in all of the main centres in Q4 2020.
Tauranga saw a relatively large rise in the share of properties being resold above the original purchase price, with Tauranga's share at 99.1 per cent.
"Especially of note is the shorter hold periods in Tauranga, yet still large gains - a result of rapid growth in values there lately."
Davidson said Tauranga and Rotorua had seen average values rise solidly in recent months, although he said such gains might not continue.
"Affordability will be a growing problem, and there is a range of other effects about to take hold as well, not just in the Bay of Plenty but nationally.
"These of course include the LVR rules, but also possible restrictions on investor interest-only lending and debt to income caps for loans."
Managing director of Tremains Bay of Plenty Anton Jones. Photo / File
Managing director of Tremains Bay of Plenty Anton Jones said they were seeing big gains over shorter resale times.
Jones said a home bought just two years ago for about $800,000 sold recently for almost double its original purchase price.
"It's mainly due to the demand for Tauranga properties and interest rates are still so low. It's not surprising."
However, Jones said he expected the market would start to slow down soon.
"We are seeing what the market is now, we won't know what it might look like in the future."
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / File
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson said based on Tauranga's property market jumping 23 per cent in the past year homeowners were bound to make a resale gain.
"But at the same time, there's going to be highs and lows in that gain and that's off the back of location and competition."
Anderson said since about July they had seen values be determined by how much the buyer wanted to own the property.
"The rule book on property has been thrown out the window.
"We've seen some unprecedented results on property being sold in the Tauranga market driven by the desirability of coming here and the ability to work from home after lockdown."
Anderson said big property gains were not unexpected given how Tauranga's market was performing but not every property received such high resale profits and sellers were buying into the same market.
"No one wants to be left out of the market without a property."
First National Real Estate Tauranga general manager Cameron Hooper. Photo / George Novak
First National Real Estate Tauranga general manager Cameron Hooper said Real Estate Institute of New Zealand's latest figures showed Tauranga's median house price was now $905,000.
"There were only three regions that didn't see a record level, so it's no surprise that those gains are so big."
While Hooper said it was not normal to see such big gains it was nice to see some people jump up the property ladder through "hard work and giving it a go".
"It can be put down to timing for sure but I certainly wouldn't call it luck. They have had the courage to go out and make it happen.
"Most people realise you've got to buy in the same market and you've got to buy relatively quickly if you're going to buy in this market - and their options for new homes are pretty slim as there's not much out there for sale."
The downside, he said, was the pressure on first-home buyers.
