It has been slowly creeping up for months, years even. House buyers have seen median house prices tick over the $400,000 mark and beyond. Now the median price has reached a new high. Leah Tebbutt and Zoe Hunter report.
Rotorua's median house price has increased more than 40 per cent in two years, tipping over the half a million-dollar mark for the first time ever.
The latest Real Estate Institute of New Zealand (REINZ) data shows Rotorua's median house price is now $520,000 - up from the last record of $485,000 in October 2019 and $365,000 recorded in January 2018.
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It's an increase of 42.5 per cent in just two years.
Local real estate agents said the news of a more than $500,000 median house price was positive for current homeowners but could prove hard for first home buyers.
It was a surprising figure for Professionals McDowell Real Estate co-owner Steve Lovegrove, although, he did expect it would get close to the $500,000 mark.
"I did not expect it to go over that mark so it will be interesting to see whether it will maintain that level over the next few months."
Lovegrove said property prices between $400,000 and $500,000 were popular and he believed that range was "just on and a bit beyond" the reach of first home buyers.
"I think this is really reflective that Rotorua is really well priced compared to other cities and it also seems to be a real hot spot for good first home properties.
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"It is positive news for homeowners currently in Rotorua and for the market. It shows we are not a poor cousin to any city but, of course, it is negative news for anyone trying to get into the property market."
OneRoof editor Owen Vaughan said strong growth and increased demand for property had pushed prices up in Rotorua.
"While we will see that growth continue, I think that milestone of $600,000 is still a long road away.
"I think where we are at the moment is where Rotorua will sit for the next two quarters."
Tremains Rotorua sales manager Megan Davies said while their total sale volume was not up the average sale price was.
"That tells me there is limited stock on the market forcing the prices up. The majority of our sales are going to multi-offer."
Davies did not believe the median house price would stay where it was and questioned how much of an effect the coronavirus and election year would have on the housing market.
"I don't think we will meet the same volume of sales in February as we did last year."
First National principal and Rotorua REINZ spokeswoman Ann Crossley wondered whether the median house price had been affected by a number of large sales in January.
Either way, she said it was going to make it hard for first home buyers.
Meanwhile, median house prices in the wider Bay of Plenty reached a record $683,000 - 17.8 per cent up from $580,000 at the same time last year.
The Bay also recorded the highest percentage in annual sales volumes for the month of January in four years - up 11.5 per cent from 340 homes to 379.
REINZ chief executive Bindi Norwell said homeowners across most of the Bay would have been pleased with the price achieved for their properties in January, with Rotorua ($520,000) and Western Bay ($740,000) two of six districts achieving record median prices.
Norwell said the increase in median price was predominately a result of an uplift in million-dollar-plus sales in the Bay, which increased 16.4 per cent in January.
"On the flip side, this makes it even harder for first-time buyers to get onto the property ladder and means that the period of time they need to save for a deposit is likely to increase even further."
Norwell said there was an increased sense of urgency from buyers in Rotorua, with the median number of days to see falling to 44 in January this year compared to 49 last year.
Overall, Norwell said there had been increased levels of confidence in the Bay, which resulted in good auction levels.