OneRoof: Property values in half of Tauranga suburbs under January levels

OneRoof's report showed Mount Maunganui was a top-performing suburb in terms of property value growth. Photo / Mead Norton

Average property values in more than half of Tauranga's suburbs are lower now than they were in January, new data shows.

Bellevue had the biggest fall of $72,000 to $864,000 since January, followed by Mount Maunganui with a $71,000 drop to $1.64 million.

The latest OneRoof House Price Report showed the region-wide property slowdown had started to drag some of the region's strongest performing suburbs.

Tauranga's average property value took the biggest hit in the region over the quarter, dropping 2.7 per cent - or $34,000 - to $1.213m.

Just three suburbs in the city, Pāpāmoa, Maungatapu and Poike, registered value growth, with Bellevue recording the biggest drop of 6.6 per cent to $864,000.

Head of valuations at OneRoof data partner Valocity, James Wilson, said Tauranga property values were dropping as buyers digest the impact of rising mortgage rates and higher cost of living.

Head of valuations at OneRoof data partner Valocity, James Wilson. Photo / Fiona Goodall

Wilson said property values were returning to levels from the highs seen in early 2022 in some suburbs as buyers adopted the "fear of overpaying" and took advantage of reduced competition in the market.

"First-home buyers had retreated from 33 per cent of the buyers to 28 per cent in the past quarter."

Bay of Plenty's average property value was $1,071,000, down 0.7 per cent - or $8000 - in the last three months.

But house prices were still 2.72 per cent above where they were at the start of the year and 14.3 per cent - or $134,000 - above June 2021 levels.

Whakatāne was the only other territorial authority to register growth over the quarter, with its average property value up 2.2 per cent to $819,000.

Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Heath Young. Photo / Andrew Warner

Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Heath Young said the price drop was not surprising for Tauranga and Rotorua markets.

"Over the last three months, there have been a large number of factors that have impacted on the property market all at once in a real sharp noticeable change in market conditions."

The reasons were namely interest rate rises, inflationary pressures and to a lesser extent the direct impact of Covid illnesses resulting in fewer deals being made and property taking longer to sell, he said.

"We are, however, still seeing well-presented, well-marketed property perform well and are starting to see more and more activity in our auction rooms."

First National Real Estate Tauranga general manager Cameron Hooper. Photo / George Novak

First National Real Estate Tauranga general manager Cameron Hooper said there had not been a flood of listings to the market, which had reflected the "slow-landing" of average prices.

First-home buyers remained quiet and price expectations had been "sliced in half", he said.

Hooper said most buyers had to sell their property before going unconditional on another home.

"It is almost like anybody in a position to purchase straight away have been eroded. Those cash buyers have gone."

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Tauranga Harcourts managing director Simon Martin said the data reflected the current supply and demand dynamic.

There were about 700 properties for sale in Tauranga last month but only about 100 sales, whereas this time last year it was almost the opposite, he said.

"We started noticing a change in February and it certainly happened quite quickly."

Tauranga Harcourts managing director Simon Martin. Photo / Supplied

Property Brokers Bay of Plenty regional manager Simon Short said there were restrictions happening in Tauranga's property market.

Short said there was a "massive" supply of property for sale but demand had dropped as buyers were no longer in a rush to buy.

"But it is not as dire as everyone thinks."

First-home buyers were in a "prickly position" with rising interest rates and had not been as active in the market.

"They are trying to track the bottom of the market and are just sitting and waiting."

Property Brokers Bay of Plenty regional manager Simon Short. Photo / Supplied

Winners and losers: OneRoof House Price Report

Most expensive suburb:
Mount Maunganui, down 2 per cent over the quarter to $1.644m

Cheapest suburb:
Parkvale, down 4.4 per cent over the quarter to $736,000

Strongest growth suburb:
Maungatapu, up 2.3 per cent to $1.086m

Suburb with the biggest quarterly gains ($):
Maungatapu, up $24,000 to $1.086m

Suburb with the biggest quarterly declines:
Bellevue, down 6.6 per cent to $864,000

Source: OneRoof/Valocity