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A house in Mount Maunganui's Oceanview Rd has sold for a $2 million profit after it was put on the market for the first time in 33 years.
A report reveals nearly all Tauranga properties sold above their original purchase prices in the past three months although the median gainwas $265,000.
Tauranga real estate agents say properties were attracting multiple offers and, in some instances, sales were exceeding asking prices and vendor expectations.
CoreLogic's latest Pain and Gain Report showed about 98 per cent of Tauranga property resales made a gross profit in the third quarter.
The gross profit from resales between July 1 and September 30 was $101,344,288. The median for Tauranga properties sold at a loss was $25,000.
Properties in the city that resold for a gross profit in the third quarter were held for a median six years, and houses resold at a loss were owned for a median 2.3 years.
CoreLogic senior property economist Kelvin Davidson said nationally and in Bay of Plenty, listings were still tight and demand from investors and first-home buyers was strong, which was pushing up prices.
"The upshot is that anybody who had held their property for a number of years is almost guaranteed to sell for more than they paid.
"I can't see these trends turning around to any great degree in the short term either, so I'd expect 'gain' to stay pretty strong in our next report [covering Q4], and also into 2021."
OneRoof editor Owen Vaughan said a lot of the gain people would have seen on their homes would have come post-Covid.
"These extra dollars are coming from a heated market," he said.
"That's evident in the Rotorua market, which has picked up speed and has been supercharged like Tauranga in the past couple of months.
OneRoof editor Owen Vaughan. Photo / File
Vaughan said Tauranga and Rotorua have had a record few months and "it's going to get hotter".
"Buyers are having to stretch themselves. They are having to make the best offer that's out there. They don't want to lose out."
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said multiple offers on property usually either met or exceeded the reserve price.
Managing director of Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / Andrew Warner
"It's challenging. Most properties have two, three or four buyers, which is creating growth.
"Certainly there are a lot of vendors out there that are rapt at the moment with what their properties are selling for and a lot of happy buyers too."
General manager of Tremains Bay of Plenty and Waikato, Anton Jones, said many vendors were "very happy" and most homes were selling above vendor expectation.
"That's happened quite consistently especially in our auction rooms. You're getting a lot of happy buyers too because they're finally able to secure their own home."
General manager of Tremains Bay of Plenty and Waikato, Anton Jones. Photo / George Novak
Jones said a Mount Maunganui home this week sold for $2 million, which was much higher than the vendor expected.
Cameron Hooper of First National Bethlehem said more homes were selling above valuation.
However, he said most buyers were still treading with caution and the banks were keeping people honest with stricter terms and responsible lending criteria.
"Our latest deadline or set date for sale was brought forward by a week due to good marketing and strong interest that resulted in seven offers.
"This sale far exceeded vendors' expectations and it's great to be a part of that process."
Hooper said the market under $750,000 was "full steam ahead".
"We are finding the higher end properties are expecting results like that but in some cases, it's not happening purely because there's less demand/buyers than something under say $700,000."
Tauranga Harcourts managing director Simon Martin said it all came down to supply and demand.
"You might have a property with plenty of activity one week and have a similar property come up a bit later but nothing happens. It's a very fluid market."
Oliver Road Estate Agents partner Jason Eves said the figures spoke for themselves.
"Kiwis regard property as a sound investment and most appreciate that the longer it's held
the more valuable it will typically be.
"The properties we are selling in our luxury and lifestyle market segment are selling at or above the top end of our market value range expectations, which reflects the nature of the current property market."
Tauranga's biggest gains
73 Oceanview Rd Sold: July 27 2020 Last sale price: $2,150,000 Previous sale price: $76,000 Price difference: $2,074,000 Years between: 33
54B Orkney Rd Sold: 7 September 2020 Last sale price: $2,450,000 Previous sale price: $550,000 Price difference: $1,900,000 Years between: 7
12/199 Papamoa Beach Rd Sold: September 16 2020 Last sale price: $2,225,000 Previous sale price: $550,000 Price difference: $1,675,000 Years between: 19
7 Commons Ave Sold: July 15 2020 Last sale price: $1,700,000 Previous sale price: $421,000 Price difference: $1,279,000 Years between: 25
17 Western Rd Sold: August 8 2020 Last sale price: $971,000 Previous sale price: $115,000 Price difference: $856,000 Years between: 37
