Western Heights homes have "skyrocketed" in value. Photo / File
Western Heights homes have "skyrocketed" in value. Photo / File
A new report on how Rotorua's property market performed in 2019 reveals which suburbs are the most expensive and affordable, which has "taken off" and where the action is. Zoe Hunter reports.
Median property values in Western Heights have more than doubled in the past five years, new data shows.
A new property report has revealed the Rotorua suburb recorded the greatest change in median value in a year (13.8 per cent), three years (43 per cent) and a massive 107.6 per cent after five years.
CoreLogic's 2019 Best of the Best New Zealand report is a suburb analysis of a variety of measures to determine property market performance across the year.
The report also unveiled the city's most expensive and affordable suburbs, with Western Heights recording the lowest median value at $343,000.
CoreLogic senior research analyst Kelvin Davidson. Photo / File
CoreLogic senior research analyst Kelvin Davidson said he suspected low listings would be a factor in pushing up prices, while the cheaper suburbs "always have affordability on their side".
"The 'posh' suburbs always appeal to those with higher equity and looking for the best homes," he said.
OneRoof editor Owen Vaughan said there was a lot of unease in the property market at the start of 2019 due to the Capital Gains Tax and changes to tax breaks that property investors enjoyed.
However, he said there was more confidence in the market towards the end of the year.
OneRoof editor Owen Vaughan. Photo / File
First National principal and Rotorua REINZ spokeswoman Ann Crossley said Western Heights was where all of the "action" was.
"Investors and first-home buyers have been active parts of the Rotorua market," she said.
"Western Heights is basically a 1960s suburb, which has got good solid family-type homes."
She questioned if the suburb was undervalued five years ago.
Historically, property values tend to double in 10 years, Crossley said, which meant Western Heights was "well ahead" in half of that time with some homes doubling in value in just five years.
"We have felt that growth in the last few years," she said. "I think it is great news. It is a market correction through the suburbs showing where the demand is."
First National principal and Rotorua REINZ spokeswoman Ann Crossley. Photo / File
Professionals McDowell Real Estate co-owner Steve Lovegrove said there was a "generational change" in what was happening with property in Rotorua.
"Five years ago we were dominated by rental properties. It was always an investors' world," he said.
Lovegrove said first-home buyers had started to surface again in the past few years following the pressure on house prices and some investors choosing to leave the market.
Western Heights was originally developed in the 1960s as a family home area that went through the rental phase and was now moving back to mostly owned and occupied by families, he said.
Professionals McDowell Real Estate co-owner Steve Lovegrove. Photo / File
"We are also seeing confidence in the market as sellers are choosing to renovate their properties," he said.
"If it keeps going in this direction we might see an entire turnaround in the demographics [of the area]."
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys, said the level of capital growth had slowed in the past year.
"There is still growth in the Rotorua market, but not as much as in the last two or three years," he said.
"We did see exceptional growth in the lower value areas for a number of years because people are still looking for value."
Anderson said interest rates were low and yield levels were high, which meant people were willing to dig deeper into their pockets to get a good return on their properties.
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys. Photo / File
"But even though we have seen some slowing, investors and buyers can still see value in the Rotorua market," he said.
"It reflects the growing confidence of the business community."
Tremains Rotorua sales manager Megan Davies said Rotorua "has really come of age".
Davies said feedback from her team of agents suggested 70 per cent of their purchasers were first-home buyers in the up to $450,000 price bracket.
"There is a new generation who have been able to purchase at the affordable end, but that has risen due to buyer demand," she said.
