Tauranga houses remain beyond the reach of many young people

Sarah Watene is looking for a first home to buy in Whakatane - she says houses in Tauranga are too expensive. Photo/Andrew Warner.

House prices in Tauranga have eased slightly but one prospective first-home buyer says many in her shoes fear being a generation of renters.

The latest data from the Real Institute of New Zealand reveal the city's median house price decreased 0.6 per cent from $628,500 in September 2016, to $625,000 in September 2017.

The number of houses sold in Tauranga decreased 6.9 per cent from 262 in September 2016 to 244 in September 2017.

Tauranga's real estate experts do not think the drop in median value is the beginning of a trend for the city. They say prices look steady and expect more interest in the city's property market heading into summer.

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For many, like Welcome Bay woman Sarah Watene, buying her first home in the city is unattainable. She is looking further out of the region to break into the housing market.

Ms Watene said the couple were looking to buy in Whakatane because everything they had viewed in Tauranga exceeded their $380,000 budget.

"We have given up here because the ones we did look at auction went for the mid-$400,000."

Ms Watene, who worked part-time and was supported by her partner who was an apprentice, said there was a feeling among prospective first-home buyers that they would be a generation of renters forever.

"If we were to buy even four years ago we would have easily of found a house here for that price range," Ms Watene, 33, said.

"The fact it has increased in such a short time is the issue. If you do not have that 20 per cent deposit, they do not even look at you."

Ms Watene rented her parents' home in Welcome Bay with her partner and their three children and had been looking to buy since June.

She was not looking for anything fancy, just something that met their budget and had a decent-sized yard.

The mother-of-three said most properties the couple had looked at in Tauranga were auctioned which also made it harder to buy with the fear of being outbid.

The couple had been saving for a deposit for the past few years and planned to use KiwiSaver and the HomeStart grant to buy their first home.

REINZ regional director Philip Searle said the Bay of Plenty market remained subdued compared with this time last year with both listings and sales down.

However, prices were holding up in a number of areas within the Bay, he said.

"Interestingly, owner occupiers make up about 60 per cent of buyers (whereas August this group made up 95 per cent of buyers), with the remaining 40 per cent split equally between first-home buyers and investors."

Harcourts Tauranga managing director Simon Martin was surprised to see the volume of house sales in Tauranga had dropped.

"You have two marketplaces which are next to each other, with Mount and Papamoa doing really well but Tauranga is not doing so flash at all."

Mr Martin said there had been pressure on prices from the second half of 2015 to the first half of 2016.

"There was high demand and low supply which put pressure on prices."

Since then he said there had been more properties on the market but a softening of demand which reflected the volume of sales.

Simon Anderson, chief executive of Realty Services, which operates Bayleys and Eve's, said the lower number of houses on the market was due to uncertainty about the election and the weather.

"People do not want to put their houses on the market when it is pouring with rain. That is delaying their decision to go on the market."

Mr Anderson said the median house price was steady and he expected the number of houses on the market to increase because people still had their eyes on the market.

"Christmas is around the corner and people will need to hurry to get their houses on the market before then."

Tauranga First National owner Anton Jones said there were a lot more people coming to Tauranga and more house and land packages being sold which was not included in the figures.

He said although there was a shortage of listings the market was good with many buyers entering the market and plenty of multi-offers.

"I have done two multi-offers this week, one was with a property over $1 million. The top end of the market is going quite well."