Tauranga real estate experts say new data showing record house prices but fewer sales offers hope to first time buyers planning to crack into the housing market.
Statistics released by the Real Estate Institute of New Zealand yesterday showed median house prices across the Bay of Plenty and Waikato rose 21.3 per cent in October to reach a new record high, compared with 12 months ago.
In October, median prices were up 17 per cent in Tauranga to $550,000 and up 20.6 per cent in Mount Maunganui and Papamoa to $640,000, while Rotorua's median values soared 51 per cent to $371,750 compared to the previous year.
Sales volumes in Tauranga dropped 33.3 per cent from 192 sales in October 2015 to 128 last month. In Mount Maunganui and Papamoa, sales dropped 28.7 per cent from 157 in October 2015 to 112 last month.
But Bay of Plenty real estate experts said lower inventory levels across the region were now turning around, with more properties coming on the market in the past few weeks.
REINZ regional director Philip Searle said there were fewer investors in the market and some decline in first home buyers, which he attributed to tighter loan to value (LVR) rules and bank lending conditions. REINZ data indicated that inventory levels were remaining low across the region.
However, chief executive of Eves and Bayleys Ross Stanway said its new listings had increased substantially in the past two-to-three weeks.
"We've got a significant number of auctions lined up between now and Christmas," he said.
"And that has changed from a few months ago where there was a lower level of listings, and pretty much anything that came onto the market was snapped up. We now have more people putting their properties on the market so there is more choice for people converting from being a seller to a buyer."
Greg Purcell, a director with Ray White Group in Papamoa, also said there had "absolutely" been a pick up in inventory in recent weeks.
"We've seen a slowdown in sales in the lower ranges, with less people competing in that space.''
Mr Purcell attributed the change to the impact of the new loan to value rules on investors, especially Aucklanders future-proofing by trying to get a foot in the regional property market.
"But the upper part of the market is bowling along quite nicely," he said.
Harcourts Tauranga co-managing director Nigel Martin said there were definitely more houses coming on the market, which meant more people felt like selling because they felt they had more options to buy another property.
"What we've seen over the last month is properties in the mid-to-higher end have been strong, with good activity in that $650,000 upwards range. But we're finding that lower-priced property activity has probably dropped back a bit."
The pullback by investors offered an opportunity at the lower price ranges, he added.
"I think we're going to see more first home buyers come back into the market over the next few months as they realise there are some good opportunities in that lower price range."
However, a number of sources also noted they were seeing some first home buyers now looking further afield for lower priced properties and being willing to commute in order to secure cheaper housing options.
Bay of Plenty Median prices - October 2016
- Tauranga - $550,000
- Maunganui/Papamoa - $650,000
- Rotorua - $371,750
Market allows couple to upgrade
Athol Frank, who recently acquired a property in Judea with his partner Helma McIndoe, has spent the past 12 months attending property auctions each week and watching the Tauranga property market.
They bought his house in Tekoah Place, Judea, for $820,000, and benefited from him getting a good price for his previous house in Lilac Lane, Cherrywood, he said.
"I knew my place in Lilac Place was worth a good price, so when I sold, we were able to update to a way nicer home for very little money," said Mr Frank.
The Cherrywood property was due for renovation in the form of new carpets and wallpaper, and perhaps a new kitchen, he said.
"But I knew I could get top dollar with its location without doing it up," he said. "Whereas the new place we've bought is only nine years old, is two storeys with a lift and has beautiful views."
The changeover price had been $120,000, he said.
The buyer of Mr Frank's Cherrywood property, who asked not to be named it, said she had bought it initially as an investment property, but had a longer term goal of moving into it for personal use.
Crystal Harvey, the Eve's Real Estate agent who handled Mr Frank's transactions, said the market was still active.