House sales on the coastal strip have hit a three-year high as activity in the Tauranga residential property market continues to get stronger.
A total of 99 properties at Mount Maunganui and Papamoa changed hands last month, surpassing the previous best month when 97 houses were sold in March 2009.
The February sales were 66 per cent ahead of the same month a year ago, and followed a December surge with 75 unconditional deals, compared with 49 a year earlier.
"I'm quite confident that the tide has turned and the recovery is on," said John O'Donnell, principal of LJ Hooker Mt Maunganui and Papamoa. "The banks and buyers are keen to do something and March is also looking like a good month."
Greg Purcell, principal of Ray White Real Estate at the Mount and Papamoa, said: "There is confidence back in the market but it's not heady. Section sales are starting to go through and that's an indicator that things are quite healthy."
Ross Stanway, spokesman for Bayleys and Eves Realty, said people realised existing price levels were "very good value for money" and the Mount, Bayfair and Papamoa were places to live or get a rental investment.
"I think we are looking at a sustainable lift in activity which has been quietly building over the past few months," he said.
Simon Martin, managing director of Harcourts Advantage Realty, said there had been a marked increase in activity: "We are bouncing off a massive low, I should say in terms of what we are comparing to, but the increase in volume is great to see."
Across the harbour, volume remained solid with 117 sales last month, up from 93 in January, 108 in December and 113 in November. February was also well ahead of the same month last year with 86 sales.
The recovery locally was based on improved sales activity and not increased prices.
The main buyers, first homeowners, were purchasing in the $500,000 and under price bracket at the Mount - though there were four sales over $1 million there last month - and in the $400,000 and under bracket at Papamoa and in the rest of the city.
New Zealand Real Estate Institute figures showed the median selling price reached $415,000 on the coastal strip last month, up from $388,750 in January but well below the peak of $470,000 in February 2008.
The median for the remainder of the city was $350,000 last month, down from $360,000 in January and far away from the peak of $406,000 in October 2007.
The average sale price in the whole Tauranga city for the three months ending February was $392,316 compared with the previous $392,814, QV Valuations said. Property values had improved 1 per cent in the past year compared with 6.5 per cent in Auckland City. Tauranga values were still 11.3 per cent below the 2007 peak, whereas in Auckland City values were 5.1 per cent ahead of the peak.
Shayne Donovan-Grammer, of QV in Tauranga, said many homes were still slightly over-priced. Realistically priced, well-presented homes in the low to mid value range were selling.
Mr O'Donnell and Mr Purcell said if there continued to be a shortage of properties on the market at the Mount, then prices would start rising.
Buyer interest was out there.
Mr Purcell said indecision had been a plague for some time but now people were making decisions. "We are getting inquiries right across the board."
A 600sq m section at Oceania Sands had just sold for $230,000 and other section sales in Papamoa had gone through between $160,000-$200,000.