Values rise despite sales dip

Tauranga Harcourts managing director Simon Martin said sales had been low this year despite higher values and put it down to the lending restrictions imposed last year.

House prices in Tauranga rose more than 17 per cent last month despite another drop in the number of homes sold, according to latest figures.

Western Bay of Plenty real estate agents put both changes down to the continuing impact of the Reserve Bank's lending restrictions.

Latest Real Estate Institute of New Zealand (REINZ) figures show the median Tauranga house price in June rose 17.4 per cent year-on-year to $405,000, while property sales slipped from the previous year, dropping from 125 to 119.

Sales in Mt Maunganui and Papamoa dipped to 77 from 81 last June, but house prices were up 2.4 per cent at $420,000.

Tauranga Harcourts managing director Simon Martin said sales had been down every month this year compared to last year, LVR restrictions knocking out the lower price bracket as first-home buyers struggled to save the 20 per cent needed for a deposit.

Despite the slow-down, the market was more stable than it had been in years and signs were that things were picking up with more homes now being listed, he said.

"The rest of the economy and the rest of the economic indicators are really positive. As things go on I think it will correct itself," he said.

Realty Services chief executive Ross Stanway had also noticed a slow down.

"The median in Tauranga, that is always accounted for by what price range houses have been selling in," he said. "In the last 12 months properties at a lower price range were selling. That would have been before the Reserve Bank's LVR restrictions came in. Now more properties are selling in higher value areas."

Ray White Realty Focus Mount Maunganui and Papamoa franchise owner Greg Purcell said last month was the flattest month he had seen in years.

"Everyone looks for nice tidy reasons why things happen but it's usually a result of a collision of things," he said. "The never ending rain, the OCR going up and being signalled that it will keep going up, an election year, the start of the world cup - people get distracted."

QV valuer Mairi Macdonald said new developments in Papamoa were making the area more affordable. For $400,000-$500,000, buyers could get what would be worth about $800,000 in Tauranga or an established area of Mt Maunganui.

She agreed the increase in house values had slowed since the home loan restrictions were imposed.

"Bethlehem is moving, and my understanding is there's been a few more Auckland buyers come down. They can sell a million dollar house in Auckland and spend $600,000 or $700,000 in Tauranga and get a house that's twice as nice." ...