Tauranga residents who sold their homes in the first quarter of 2020 made a median profit of $269,375 per property, new data reveals. Photo / File
Tauranga residents who sold their homes in the first quarter of 2020 made a median profit of $269,375 per property, new data reveals. Photo / File
Tauranga residents who sold their homes in the first quarter of 2020 made a median profit of $269,375 per property, new data reveals.
Real estate experts say although the local property market was "running hot" in the first three months of 2020, there is now a line in the sandin terms of what happens post-Covid-19.
However, there was no lack of buyers post-lockdown, experts say, and things are "clicking back into gear" with a "frenzy" of activity in the local market.
CoreLogic's latest Pain and Gain report showed the city's gross profit from sales between January 1 and March 31 was $112,045,242.
The median for Tauranga properties sold at a loss was $15,000, with a gross loss of $150,000.
Properties in the city that resold for a gross profit in the March quarter were held for a median 6.6 years, while houses resold at a loss were owned for a median 1.7 years.
CoreLogic senior property economist Kelvin Davidson said Tauranga and Rotorua remained solid markets in the first quarter, with property values rising.
"So you'd expect strong resale performance, especially if the property had been held for a long time."
More generally, however, Davidson said the statistics were now a line in the sand.
"The world has changed since Q1 and resale performance probably won't be as strong in the coming quarters (with resales themselves probably becoming less frequent, as homeowners sit tight)."
Research from OneRoof and its data partner Valocity identified properties bought in the two years leading up to the Global Financial Crisis, and how many were resold during the GFC and after.
Tauranga figures showed of the 9314 properties bought between June 2005 and 2007, 14.83 per cent were resold during the GFC and another 12.62 per cent post-GFC.
About 68 per cent of the 941 homes resold during the GFC turned a median profit of $35,000, while 41 per cent of the 484 sold in the two years after the GFC made a median profit of $25,000.
For the 12 per cent of 170 properties that did take a hit, the median loss was $20,000 during the GFC and $25,000 in the two years after.
OneRoof editor Owen Vaughan. Photo / File
OneRoof editor Owen Vaughan said in the lead-up to lockdown it was evident the market was "running hot" in several regions.
"People were starting to make big gains," he said.
"What will be key going forward is not so much in the period immediately after lockdown, where there will be high sales and demand, but the period afterwards.
"That is where we can gauge the path to recovery."
Eves auctioneer Grant Child. Photo / Supplied
Eves auctioneer Grant Child said there was strong buyer activity post-Covid and there was no evidence of a drop in property values despite some economists' predictions.
Child said activity in the auction room was an example of that with Eves selling 10 homes under the hammer on May 28 and one prior to auction day.
He said there had been plenty of pre-auction activity with two properties scheduled for auction in late June brought forward.
"Because there was more than one person who wanted that property we had competitive bidding in the auction room.
"One sold for $23,000 above the vendor's expectation."
Child said real estate agents were experiencing high numbers through open homes and multi-offers on a number of properties.
"Owners who are prepared to meet the market and be realistic are achieving their goals."
He said Tauranga's auction activity was in line with what was happening nationwide.
"Whether we are riding a wave time will tell but it appears people are just getting on with life."
First National Tauranga general manager Cameron Hooper. Photo / File
First National Tauranga general manager Cameron Hooper said the Covid-19 effects on the property market would not be as volatile as the GFC.
"While the brakes are going to come on it is not going to be a sudden stop," he said.
"You have got family homes and people who are still stable in employment. People are still cautious but they are still confident to make an offer.
"Demand is the same and there is no lack of buyers."
Tauranga Harcourts managing director Simon Martin. Photo / File
Harcourts Tauranga managing director Simon Martin said a reasonable amount of supply and demand held the market strong in the first quarter.
"But now we have set the re-set button."
However, there were still some positives in the market post-Covid-19 with low-interest rates and LVRs being ditched.
"We came into this market with very low listings because that first quarter was so strong. But things have increased and we have seen some inquiries into the market."
Martin said there had been 640 physical property inspections in 10 days.
"People are out there looking at property. It looks to be clicking back into gear."
A lot of that inquiry, Martin said, was coming from ex-pats looking at investing back here.
"That is encouraging that people are focusing on New Zealand."
General manager of Tremains Bay of Plenty and Waikato, Anton Jones. Photo / File
Anton Jones, general manager of Tremains Bay of Plenty and Waikato, said February and March were record months for the company.
He said March would have performed even better if it wasn't for Covid-19.
"That really put a halt on things, we were tracking for an incredible month," he said.
However, Jones said there had been many property deals and multi-offers post-lockdown.
"There is a frenzy of activity at the moment. If you black out the last six to eight weeks you wouldn't have thought anything happened.
"The concern is how long that is going to last. But we are trying to remain optimistic. Tauranga is a special place."
Tauranga's top five gains
1F Marine Parade Sold: February 1, 2020 Hold period: 24 years Sale price: $2,235,000 Previous price: $565,000 Gross profit: $1,670,000
37 Fourteenth Ave Sold: January 20, 2020 Hold period: 9 years Sale price: $2,000,000 Previous price: $450,000 Gross profit: $1,550,000
17 Stratford Pl Sold: March 5, 2020 Hold period: 33 years Sale price: $1,320,000 Previous price: $179,000 Gross profit: $1,141,000
320 RB Oropi Rd Sold: February 27, 2020 Hold period: 19 years Sale price: $1,520,000 Previous price: $532,500 Gross profit: $987,500
73 Oceanbeach Rd Sold: February 16, 2020 Hold period: 27 years Sale price: $1,100,000 Previous price: $180,000 Gross profit: $920,000
