Six Tauranga suburbs priced below half a million dollars

Only six of Tauranga's 46 suburbs have a median house price of less than half a million dollars, according to new figures.

Homes.co.nz's analysis has found Gate Pa, Greerton, Hairini, Judea, Parkvale and Poike have a median value below $500,000 - the only suburbs in Tauranga.

This is the maximum value that a first home buyer can be eligible for the KiwiSaver HomeStart Grant of up to $5000 per person.

Grants can be up to $10,000 if the first-home buyer purchases a brand new home, and the eligible house value rises to $550,000.

This means people buying over this amount were paying more, but ineligible to receive any extra help from KiwiSaver - a double blow.

Jeremy O'Hanlon, homes.co.nz spokesman, said with only 13 per cent of suburbs offering an average house below the threshold, it's important buyers do their homework.

"Being offered $20,000 towards your first home deposit is a huge hand up, it's just a shame the number of homes available under the $500,000 has reduced so drastically in Tauranga".

Six additional suburbs had lower quartile prices - meaning the median value of the cheapest 50 per cent of houses - below the half million dollar limit. These were Bellevue, Brookfield, Maungatapu, Tauranga, Tauranga South and Welcome Bay.

Chief executive of Eves and Bayleys, Simon Anderson, said homes were available but clearly it was tougher.

"There are good opportunities in Tauranga but obviously those are getting less than they used to be.

"But there are bigger issues as far as unaffordability goes. There are bigger social and educational issues underneath all of that."

He also said first-home buyers maybe have to cast their eye further afield and be willing to work hard.

"I think probably the younger generations have expectations of living in the best suburbs rather than starting at the bottom of the property ladder. That is an issue."

"New home buyers need to be looking for houses that need renovation, where they'll spend their weekends improving the value of their home."

Managing director of Mt Maunganui Harcourts Nigel Martin said after increasing the limits of house values eligible for KiwiSaver grants in August last year, further price increases could mean they need to be looked at by the Government again.

"It's something the Government could do - to increase that cap would certainly help a first home buyers enter the market.

"A lot of it comes down to availability of land to purchase on, and whether the Government and Council has ability to access that land. Most of the land we're dealing with here is privately owned . . . so we're tied into the developer's process to get this land up and running."

Greg Purcell of Ray White Papamoa said thankfully for first home buyers, Auckland investors had dried up.

"A year ago we used to have a room full of Aucklanders filling our auction rooms. Now it's one or two.

"Certainly a lot more of the purchases are local buyers."

Glad to find a home

A young couple consider themselves lucky to secure a home in Greerton, for $380,000.
Originally from Whakatane, Rachel Mallasch, 26, and Zal Izett, 30, moved into a three-bedroom house on a 650sq m section in January last year.

Rachel cashed in her KiwiSaver account and gained a $3000 Home Start grant; Zal brought home about $50,000 from working in Australia.

He already owns a half share of a house in Whakatane with his brother so Zal wasn't able to draw on his KiwiSaver.

The couple are delighted with the fruit trees on the property. They have been gathering lemons, oranges, grapefruit, plums and grapes.

The backyard is north-facing and spacious with a greenhouse - "It was smothered in oxalis but we have been gradually clearing the weeds. It's pretty much clean now," said Rachel, who says she is a keen home renovator.

They have plans for remodelling the house, originally built in 1961.

Rachel works for Palazzo Kitchens & Appliances as a senior designer.

"I've already drawn up plans for a new kitchen and can't wait to set it up," she said.
Zal works for Fire Security Services Ltd.

Both enjoy the relative quiet of their neighbourhood. "It is a great location, not a main road which is important because we have pets".

Dusty, their 4-month-old border collie, has the freedom of the house and backyard.

The purchase process was quite drawn out for the young couple. They made an offer in October 2015 but didn't settle in until January last year.

"We felt really lucky to get it."

There is room for garaging for three cars beneath the house.

Rachel's sister is living in an area which they may return to a double garage.