Shortage of Tauranga homes drives up prices

Real estate agents say it's more of a sellers' market than a buyers' market. People are worried if they sell they won't be able to find what they need. Photo/File

More than 300 houses sold in Tauranga last month but real estate agents say a shortage of stock continues to drive up prices as demand outstrips supply.

Figures from the Real Estate Institute of New Zealand show in May 323 houses sold compared to 327 in May 2015.

QV homevalue Tauranga registered valuer David Hume said values on average had risen by $136,746 or more than 28 per cent, across the city in the last 18 months.

Values were 22.9 per cent higher than the previous peak in 2007 and the average value was now $591,942 according to the latest QV House Price Index, he said.

"The market is more a sellers' market than a buyers' market at the present time."

Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said there had been a track record of "really good sales but they are not being replenished and nothing is coming in".

Potential vendors were nervous, he said.

"We are doing plenty of appraisals but people are shuffling towards the line of putting it on the market. People are worried if they sell they won't be able to find what they need.

"But my biggest message is when you start seriously looking for something, no matter the market, you will find it."

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said there had been substantial price increases in most price ranges and "if anything that would be encouraging people to put their property on the market".

"But certainly currently there is a shortage of listings ... there is a lot more demand than supply."

Harcourts Tauranga managing director Simon Martin said in a town the size of Tauranga "the level of volumes should be this size if not more".

"Back in 2003 we actually had higher volumes of sales and since then a huge amount of properties have been built and a lot more available for sale. So if you look at the big picture it is not too much of a boom."

First National, Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said demand was driven up by more buyers in the market.

"The demand is higher and they sell quicker as there is more competition for homes. The really good ones get a lot of competition and then that pushes the prices up."

The real gains had kicked in over the last year, he said.

Winter was also traditionally slower, he said, and people tended to think their houses looked better in summer and spring.

"But I don't think that will happen so much this year because the market is so buoyant and people are realising they can make the capital gains or moves they want."

"It been a bit of an anomaly from the outset because essentially in the winter it's a better time to sell your house anyway as historically there are not as many properties on the market."

Priority One projects manager Annie Hill said the strong real estate sales volumes were good for Tauranga which was supported by population and strong job growth.

"This reflects business confidence and shows that our economy is growing sustainably."
However, there were two key areas of concern, the increase in traffic flows and the increase in house prices, she said.

But there was plenty of land zoned now and in the future "we are adding to our housing stock at a rate of around 135 new residential builds per month across the sub-region".