Sales blamed on lack of supply

A lack of supply is causing a drop in house sales in the Bay.

One real estate agent says the figures are also skewed because they do not factor in new builds.

Figures released by the Real Estate Institute of New Zealand show house prices in Tauranga were up 9.9 per cent to $360,064 compared to the same time last year but sales volumes were down 16.2 per cent during the same period.

Mount Maunganui prices and volumes were both up for April. The median price increased $10,000 to $450,000, 2.3 per cent, year-on-year and the number of sales rose 4.2 per cent.

Principal of LJ Hooker Mt Maunganui and Papamoa John O'Donnell said he was pleased with the number of sales he was seeing but did not believe the Real Estate Institute figures were a true reflection of what was happening in the market.

"January to now the volume of sales at Mount Maunganui was up 15 per cent and they were down 14 per cent in Papamoa."

However, Mr O'Donnell said the figures did not take into account new builds. "There is lots and lots of new building going on in Papamoa."

Mr O'Donnell said prices in Mount Maunganui were going up faster than anywhere else in the area. "There's lack of supply and huge demand. There's more people coming into New Zealand than leaving."

Tauranga Harcourts managing director Simon Martin said the volume of sales each month this year had dropped compared to last year. "The LVR is having an impact because the first home buyers are struggling to get into the market," he said

The higher prices were also a result of the lending restrictions, Mr Martin said. "The median is up on last year which we could probably put down to less volume in the lower bracket."

Mount Maunganui was not seeing the same downward trend in sales because the median price was higher, he said.

Realty Services chief executive Ross Stanway agreed the new lending restrictions were the main driver behind the figures. "That increase in median would be obvious because of the fact that most houses now are selling in the medium and above range because that lower quartile, which was traditionally first home buyers, has been impacted by the LVR."