House values surge 8.6%

QV: House values continue to rise in the Bay.PHOTO/JOHN BORREN

House values continue to rise throughout the Western Bay as interest rates remain low and inquiries from Aucklanders remain high.

According to the latest QV House Price Index, in Tauranga, the average value last month was $493,054 - 2.4 per cent above the 2007 market peak and up 8.6 per cent year-on-year.

In the Western Bay, values jumped 7.2 per cent to an average of $441,642.

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said property values had been increasing every month for quite some time pushed up by two main factors.

"The normal supply and demand - there's not a lot of property on the market but that is slowly changing. The other thing is, without a doubt, the interest from buyers outside the region, not just from Auckland."

Mr Stanway said the market had attracted local investors but agents were also seeing interest from Aucklanders who planned to move to the region and were buying properties and renting them out until they were ready to move.

There was a lot of interest from Aucklanders in Mount Maunganui, stretching back towards Concord Ave, Carysfort St and Paterson St.

About 80 per cent of the properties sold fell in the $350,000 to $600,000 range.

Mr Stanway said low interest rates meant some people could now afford the sort of house they wanted but would not have been able to afford a year ago.

Harcourts managing director Simon Martin agreed low interest rates and out-of-town buyers were the main reason for the increasing values.

"With interest rates coming down low buyers have the ability to spend more. People are getting more property for their money. What people can afford to pay for a property has increased so they are getting a better home in many cases," he said. Mr Martin said the number of listings the company was receiving was equal to, or slightly higher than, the same time last year but properties were being snapped up quickly so the volume of properties sitting on the market was lower.

The Auckland market was also forcing some people out into the provinces, including Tauranga.

But out-of-town investors were not just from Auckland, Mr Martin said. "A lot of them are from the three-hour drive radius."

Houses of every value were selling, but homes in the $430,000 to $450,000 range especially had seen more of an increase in activity, Mr Martin said.

Both men agreed the upwards trend did not look likely to change any time soon.

"I think it will last as long as the Auckland property market is in the state that it is in," Mr Stanway said.

He also expected the trend to continue for some time.

QV homevalue Tauranga registered valuer David Hume said he was getting reports of an increase in the number of property appraisals as more property owners became aware of recent increases in property values and were keen to get an idea of what their homes were now worth.

"This should lead to an increased number of listings in spring and could help to give purchasers a greater variety of listings to choose from. With many properties selling by auction it is currently quite hard for purchasers to get an accurate gauge of what a property may be worth in the rising market."