Tauranga housing market flattening off, experts say

New figures show Tauranga home values increased 6.6 per cent year on year.

However, experts say the market had "flattened off" in the last few months.

The average Tauranga house value decreased by 0.1 per cent in the last three months to $686,759, according to the latest monthly Quotable Value House Price Index. The national average was $646,378.

The Western Bay of Plenty market increased 6.9 per cent year on year and 0.4 per cent over the past three months. The market was 36.5 per cent higher than the previous peak of 2007 and the average value in the district was $614,822.

QV Tauranga spokeswoman Melanie Lewis said Tauranga and Western Bay markets continued to perform at a steadier pace than previous months.

"High-end desirable family locations such as Mount Maunganui and Bethlehem continue to be popular both with new people moving into the area and locals upsizing."

She said demand from investors appeared to have dropped off at the same time, however, rent prices had stabilised.

"As the warmer spring weather struggles to get off to a strong start and with the inconclusive results to the election, people are taking a wait and see approach to both selling and buying".

Harcourts Tauranga managing director Simon Martin said the market had "flattened off".

"It is a stable market at the moment," he said. "Over the last four months, it has sat very steady."

Mr Martin said the median sale price had increased because there were fewer people buying cheaper homes.

"The average has been pushed up because there is less properties in the lower bracket selling."

First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said the market did not seem to be slowing down, with September being the company's top sales month for the year.

"If anything I thought it would have slowed down because of the election," he said. "There was uncertainty when some people stalled in what they are doing but in Tauranga, sales were going quite well."

Mr Jones said the market was strong across Tauranga, with the biggest sales area in Bethlehem, although it depended on where the listings were.

"We have had a lot of high-priced houses sell," Mr Jones said. "We had a multi-offer all over $1m on a house in Bethlehem. There were five potential buyers wanting to buy a million-dollar property."

He said lifestyle and coastal blocks remained popular.

Simon Anderson, the chief executive of Realty Group, which operates Eves and Bayleys, said he was not surprised the year-on-year figures had increased.

"We are seeing a traditional market where the level of activity we have experienced for the last two years had not been seen this year."

Mr Anderson was not surprised the last three months were flat with the market traditionally slowing down over winter.

He said the number of Auckland buyers was slowing down around the loan-to-value ratio (LVR) restrictions and bank reductions, and Aucklanders were finding it harder to sell.

"We have also had a very wet winter which influences people's feelings about whether to put their house on the market and a buildup to an election that has had more twists and turns than a snakes and ladders game," he said.

"Nobody likes uncertainty and those factors have provided uncertainty."

But Mr Anderson said sales were beginning to come back into the market.

"We are already seeing a lift in listing activity this month," he said. "I would describe the market we are in as normal compared to two years ago."

Ray White Te Puke owner Rochelle Carter said the 36.5 per cent market increase for Western Bay did not surprise her, particularly for Te Puke, Paengaroa, Pongakawa, Maketu and Pukehina.

Mrs Carter said Te Puke and Pukehina have had huge growth over the last two years.

"We are rapidly growing and attracting buyers from not only New Zealand but worldwide," she said. "We have expats returning, they are taking into consideration the size of the house and land they can purchase for their budget plus the demographics of the areas."

Boat sacrificed to help realise house dream

A Te Puke man has sold his boat to help pay for his first home, but he says it was worth it.

Mr Phillips, 36, and partner Jade McCreedy, 38, bought their first home in March this year.

He said the couple were renting in Bellevue for a few years before moving to Te Puke "for the price".

"Te Puke has everything you need. We could have bought in Tauranga but it was cheaper in Te Puke and you can make more money in the long run."

Mr Phillips said house prices in Tauranga had increased but they were lucky to secure an affordable 1980s-built three-bedroom home with 800sq m of land for $445,000.

"It was a very good price. The same house in Tauranga would have gone for at least $600,000."

Mr Phillips said the couple had spent some savings and used their KiwiSaver HomeStart grant to pay for their first home.

"Another reason why we bought in Te Puke was because it was under $500,00, which was under the threshold."

The 36-year-old said it was hard for them to purchase their first home, but they had help from Rochelle Carter at Ray White Te Puke.

"It was hard for us, but we just had to knuckle down, dig deeper and make sacrifices," he said.

Mr Phillips also had to sell his boat. "But now we have a house instead of a boat."

The couple lived with their two teenage children, aged 17 and 14, and two dogs.

Mr Phillips said the highway made it easy for him to travel to work from Te Puke to Mount Maunganui.

"Even though we are further away from where we were, the highway makes it a 15-minute drive instead of hitting traffic the other way which would make it a half-an-hour drive."