That said, however, rising interest rates have had an effect on buyers. Concerned about their ability to get finance and nervous that house prices might still fall after making any purchase, buyers are not as eager to proceed.
Tony says history shows that it's not possible to accurately predict when prices will stop falling and start rising. Which is why EVES Property Management continues to receive interest among homeowners who choose to rent their homes, rather than sell.
According to the latest stats from The Real Estate Institute of New Zealand, the median sale price for the Bay of Plenty is down 5 percent from the month prior, now sitting at $849,000. Tauranga's median sale price dropped 9 percent to $852,500. However, the Mount and Papamoa have had a 1 percent increase in median sale price to $1,015,000, with the median days to sell sitting at only 54 days, compared to 59 days the month prior.
It will be interesting to see if spring has followed tradition and revealed a turning tide. Rising interest rates have to be of concern, however. With suggestions of a further rachet to the Official Cash Rate (OCR), buyer reticence cannot help but continue.
Renting viable in the interim
Throughout Western Bay, property managers are busy as they assess market valuations, rental expectations and handle property management on behalf of clients.
EVES rental property manager Katy Laidlaw looks after properties mostly in the Mount and Papamoa. On top of those she manages, Katy has 10 advertised for rent and says more will be more coming on board, after not being able to sell.
Katy is seeing a lot of prospective tenants applying and is also receiving more interest from overseas. This level of inquiry supports the Government's recent changes to visa restrictions. With high job vacancies throughout the workplace, the number of people coming to New Zealand is expected to increase – permanently and short-term.
"There are a few who are looking for short-term places as they are here on working holiday visas," says Katy.
Short-term rental is an attractive option. Particularly as homeowners wait to see if prices rise and hesitate about a long-term rental. Renting while still marketing a property for sale is another option. It also allows the option of a reduced rent.
Katy says landlords are becoming more selective.
"However, I am also seeing a lot of owners needing to get people in as soon as possible as higher mortgage repayments kick in. I still have a few new builds coming up too."
Depending on the property, weekly rental estimates in this district run from $500 to as high as $585 for a top two-bedroom home and between $630 and $685 for three bedrooms - higher for really top homes. Four bedrooms range from $740 to $850. More upmarket properties can achieve higher rents – as much as $950. Location is always key – along with the property's quality.
Despite a fickle market and rising interest rates, property remains a viable investment. And there will always be a demand in the rental sector. So, if now isn't the right time to sell, renting is an alternative.
