Tauranga house prices reach record median of $660,000

House prices in Tauranga have reached a record median of $660,000. Photo / File

House prices in Tauranga have reached the record median of $660,000 for the second time, according to new data.

The latest data from the Real Estate Institute of New Zealand showed the median house price had reached a peak of $660,000, which it reached for the first time in June 2017.

Tauranga house prices rose 3.9 per cent year-on-year, up from $635,000.

The number of houses sold in Tauranga jumped 8.1 per cent to 293 from 271 in May 2017 - the third-highest number since June last year.

In the Western Bay of Plenty, house prices increased 5.9 per cent year-on-year to $595,000 from $562,000. The number of houses sold in the district jumped to 59 from 53 in May 2017.

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OneRoof editor Owen Vaughan said Tauranga's property market had benefited from the energy in the region's economy.

Vaughan said development and business activity had reached "critical mass".

"The city has a good climate and it has a strong service economy," he said. "Businesses there can attract and retain good staff, and its coastal climate has long been popular with retirees."

Those "crucial factors" were unlikely to change, Vaughan said.

"The fact that Tauranga boasts several suburbs that are approaching the million-dollar median-value mark suggests demand will remain even as the market enters a period of consolidation."

First National, Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said more listings were staying on the market for longer, with "spates" of offers.

"Vendors have had to be a bit more realistic with their prices," he said.

The Lakes and Maungatapu remained popular places to buy, Jones said, with listings in Mount Maunganui "hard to come by". Bethlehem had also bounced back after a lull, he said.

Welcome Bay, Greerton, Brookfield and Judea were popular choices for first home buyers who were shopping the market with a budget.

"It is really based on their income potential," Jones said.

Simon Anderson, chief executive of Realty Group which operates Eves and Bayleys, said the Western Bay was seeing strong growth.

Anderson said there had been a lift in the number of sales in the Tauranga market.

"There has been a lot of activity in May with the top end of the market remaining strong," he said.

Anderson said the first home buyer and investor market had also picked up, with the first two months of the financial year showing a positive outlook for the Tauranga market.

"We are ahead in percentage in the first two months [of the financial year]," he said. "It is looking really positive. We are expecting a good market looking ahead to June."

In the wider Bay of Plenty, house prices rose 9.6 per cent year-on-year to $589,700 from $538,000. The number of houses sold in the region jumped 7.5 per cent to 543 from 505 in May 2017.

REINZ regional director Philip Searle said the region's price jump was driven by increases in Kawerau, which reached a new record median price of $329,000.

Searle said listing numbers were down on April, but up by just 11 properties year-on-year.

"There is plenty of interest once a listing comes to the market," he said.

"The most likely scenario looking forward is that the listings remain short which might affect buyer's willingness to commit."