Gate Pa tops Tauranga property rises

Sarah Main, her partner Nick and their 5-year-old daughter are an example of the new demographic moving into Gate Pa. Photograph/George Novak

Gate Pa has recorded Tauranga's biggest jump in median property value in the 12 months to September 30, up 33.7 per cent, with Greerton and Judea close behind, according to the latest Quotable Value New Zealand E-Valuer report.

Gate Pa median values rose from $323,150 to $432,050, while Greerton was up 30.3 per cent to $482,500 and Judea was up 29.8 per cent to $484,600. Gate Pa's October value was slightly lower at $424,000.

Property experts attributed the rise in the lower-value suburbs to increased investor activity over the past 12 to 18 months. But they noted that the recent 40 per cent deposit requirements for investors had begun affecting the market in the past couple of months. And that was opening up more opportunities for first-home buyers, they said.

Te Puke recorded the biggest Western Bay increase with a median value of $419,700 in September, up 32.9 per cent on a year ago. All values in the sub-region recorded a 20 per cent-plus yearly increase, except Waihi Beach (at 19.4 per cent).

The highest median-value suburb in Tauranga in October was Mount Maunganui at $788,700, while the highest-value suburb in the Western Bay of Plenty was Omokoroa at $728,850.

Ross Stanway, chief executive of Realty Services, which owns Eve's and Bayleys, said the growing attraction of suburbs close to the city centre such as Gate Pa reflected the maturing of the city. He added that it reflected the transformation that had been experienced in earlier years by Auckland's Ponsonby.

"These areas are undergoing a major change in terms of their demographic," he said. "And they represent very competitive and attractive value for a lot of people, first-home buyers in particular." (see accompanying story)

Mr Stanway said the process was bringing change to the city. "They are breathing new life and drawing new communities into those suburbs, and that's great."

QV valuer David Hume said out-of-town investors had been a primary driver of increases in Gate Pa. However, the 40 per cent deposit for investors was now affecting the market, with investor activity easing off, he said.

"Especially the smaller-time investors, looking to pick up a second or third rental property , are now finding they're unable to continue to bump up their portfolio," he said.

"But 100 per cent, it's an opportunity for first-home buyers. There's a lot of frustrated young families that have been trying to get into the market and not able to buy."

Harcourts Tauranga co-managing director Nigel Martin agreed that the Gate Pa increase reflected the strong investor activity over the past year, with the new deposit rates now beginning to slow down price increases.

"For first-home buyers who often felt they were competing against investors, now is the time to get back into the market because there are some buys out there."

Owen Phelps, manager of Eves Gate Pa office, said the market had changed a lot at the end of September.

"There was a time when investors were buying properties unseen," he said. "First-home buyers are coming back in, and we're getting a few properties coming on to the market because of it. I think it's a more normal market now."

Greg Purcell, owner of Ray White Realty Papamoa, said he had seen a slowdown in sales over the past month or so.

"Volume has certainly curtailed. We're seeing a whole lot of stuff sitting around at the $400,000-to-$500,000 mark that would have been gone in a heartbeat six months ago."

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Sarah Main, her partner Nick and their 5-year-old daughter are an example of the new demographic moving into Gate Pa.

The young couple bought 21 Burns St, opposite the main Gate Pa shopping precinct, in November last year. They were able to buy a first home that was much bigger than they had expected and well within their budget, she said.

"When we saw it online, it was going for auction at Harcourts and we thought the price would be well above our range."

The four-bedroom plus office, newly renovated house was a lot larger than they expected to be able to afford anywhere in Tauranga, she said.

"But it was worth a look. We turned up and spoke to the agents and found it was within our budget." They ended up buying it for $395,000.

"We really like living in Gate Pa," she said. "It's so close to town and close to work, and you also miss that bad traffic between Pyes Pa and Greerton."