House prices in Tauranga rose by 10 per cent in the year ending September, despite a 23 per cent decrease in total sales, new figures reveal.
The median Tauranga house price was $374,000 in September - a $20,000 increase from August and $34,000 increase from September last year, according to the Real Estate Institute of New Zealand's (REINZ) latest figures.
However, the volume of sales decreased compared to both the previous month and same month last year.
Chief executive of Realty Services, which operates Eves and Bayleys, Ross Stanway said the figures were an indication of the LVR restrictions, which were introduced last year.
Mr Stanway said first home buyers had been pushed out of the market, which had decreased the number of sales of lower priced properties, pushing the median house price up.
However, he said, it looked as though first home buyers were increasingly able to enter the market.
"Banks are competing with favourable mortgage rates. Combine that with fairly competitive land and build packages, it is bringing those first home buyers back into the market."
He said the Bay's property market had "positive prospects" for the region.
Tauranga Harcourts franchise owner Max Martin said the market had slowed down before the general election but he had already seen a significant increase in both the volume of sales and listings.
"In the next few months, we should see the true figures of the impact of the LVR restrictions."
He said he was seeing a lot of demand for Bay homes from older couples moving from Auckland.
"They are selling their properties for $1.2 million in Auckland and buying a property here for $700,000."
Anton Jones, owner of First National in Tauranga, Mount Maunganui and Omokoroa, said there had been a spike in listings in the past couple of months, but overall listings had been down, meaning buyers had to compete for properties.
This had brought house prices up, he said.
A lot of people were priced out of the Auckland housing market and so had come to Tauranga for more affordable homes, he said.
Mr Jones believed prices would continue to rise as people continued to move to Tauranga for value-for-money housing and lifestyle opportunities.
REINZ chief executive Helen O'Sullivan said increased activity nationwide in the last 10 days of the month had not been enough and sales volumes remained well down from last year. "There has been some pick-up in listings in line with the start of spring, albeit not at the usual levels for this time of year. We will be closely watching listing levels in October, as a continued lack of choice is frustrating would-be buyers."