Tauranga median property sale prices continue to drop

MARKET SWING: The median value of homes sold in Tauranga has dropped, but Mt Maunganui is up and down. PHOTO / FILE

Tauranga's median house sale price has dropped for the second month in a row and the number of homes being sold is much lower than at the same time last year.

The median value of homes sold in Tauranga last month was $532,500 - down from $540,000 in January and $600,000 in December. The number of homes sold in Tauranga, 119, was well down on the same month last year.

It was a different story in Mount Maunganui and Papamoa, where prices fluctuated over summer and where the number of homes sold in January was higher than the same month last year.

Those were the major findings from REINZ figures released yesterday.

REINZ regional director Philip Searle said Auckland families and investors were starting to show interest in Tauranga again.

However, property owners were showing signs of "softening" in their attitudes to how much cash they could sell their homes for.

Mr Searle said this indicated "the rapid run-up in prices over the past 18 months may be coming to an end".

Tauranga Harcourts managing director Simon Martin said he believed the drop in median values was related to loan-to-value restrictions that had forced most investors to raise 40 per cent deposits for properties from the middle of last year.

Investors had initially been forced out of the market, resulting in a drop in the number of cheap homes being sold. Sales of expensive homes had continued, skewing the median sale price upwards.

However, investors were now returning to the market and buying cheap homes again and this was lowering the median price.

Mr Martin said he believed Tauranga's house values had "flattened out" because of supply and demand. Buyers had more homes to choose from because more properties were coming onto the market.

Greg Purcell of Ray White Realty Focus in Mount Maunganui and Papamoa agreed more properties were becoming available. He had seen a rise in activity half way through January, and the market seemed to be more "normal" than during much of last year.

Mr Purcell urged property owners to be realistic about their asking prices.

"The market's flattened off."

REINZ chief executive Bindi Norwell described the national property market as "a mixed picture".

Banks seemed to be reducing their lending and becoming more selective about who they lent to and for which properties, she said.

REINZ's sale prices are medians. These are calculated by ranking all homes sold from the least expensive to the most expensive and choosing the value of the home in the middle.

Median house sale prices

Tauranga

February 2017: $532,500 (119 homes sold)
January 2017: $540,000 (78 homes sold)
December 2016: $600,000 (121 homes sold)
November 2016: $590,000 (163 homes sold)
....
February 2016: $493,500 (174 homes sold)

Mount Maunganui / Papamoa

February 2017: $671,500 (98 homes sold)
January 2017: $632,500 (80 homes sold)
December 2016: $615,000 (85 homes sold)
November 2016: $671,250 (163 homes sold)
...
February 2016: $585,000 (111 homes sold)