The number of property sales in the Bay of Plenty has plummeted 41.3 per cent in the last year. Photo / Getty Images
The number of property sales in the Bay of Plenty has plummeted 41.3 per cent in the last year. Photo / Getty Images
The number of properties sold in the Bay of Plenty has plummeted 41.3 per cent in the last year, new data shows.
It comes as Rotorua's median house price dropped $34,000 in the last month.
Property commentators expect prices to keep falling until the middle of next year but saythere was "light at the end of the tunnel". Rotorua was expected to recover faster than Tauranga.
The latest Real Estate Institute of New Zealand figures showed the Bay had the second-biggest annual fall in the number of sales behind Auckland.
The number of sales in the region dropped 41.3 per cent - or 189 - to 269 since June last year. Auckland recorded the biggest drop of 43.3 per cent - or 1235 - to 1618.
Rotorua's sale count dropped from 98 in June 2021 to 42 last month. There were 65 sales in May.
The city's median house price fell 5.2 per cent - $34,000 - to $615,000.
First National principal and Rotorua REINZ spokeswoman Ann Crossley. Photo / Andrew Warner
First National principal and Rotorua REINZ spokeswoman Ann Crossley said the last time Rotorua recorded property sales in the 40s was a month after the first Covid-19 lockdown in 2020.
Now new, more relaxed, CCCFA guidelines had been introduced and the Reserve Bank had raised its official cash rate (OCR) to 2.5 per cent in its latest bid to head off inflation.
"There is light at the end of the tunnel," Church said.
"This has just been a blip in the market and things will start to settle down."
Church said Rotorua would recover faster than Tauranga because it was a more affordable market.
"It costs less to buy there and therefore the Rotorua market has remained as a market for first home buyers, owner-occupiers and to lesser extent investors."
Whereas Tauranga had prices similar to Auckland, he said.
Church said the Bay market will look a lot more subdued in the second half of the year as "cautious confidence" returned among buyers.
"There are signs, particularly in Rotorua, of things returning to normality. Tauranga will take a bit longer but it will come out the other side too."
Independent economist Tony Alexander. Photo / Fiona Goodall
Independent economist Tony Alexander said people can expect prices to keep falling for the second half of the year.
That was because factors including rising interest rates and cost of living, tightening of the LVR, and changes to the CCFA were still in play.
There had also been a correction of exorbitant prices, with buyers no longer having FOMO - fear of missing out and FOOP - fear of overpaying.
"I expect prices to have stopped falling in most parts of the country by the middle of next year."
REINZ regional director Neville Falconer. Photo / Supplied
REINZ regional director Neville Falconer said the Bay of Plenty's median house price jumped 8.4 per cent year-on-year to $900,000.
"Owner-occupiers and first home buyers are the most active in the market, whereas investors remain quiet, largely due to tax legislation.
"Vendors are slow to adjust their price expectations to current market dynamics."
Falconer said buyers still feared overpaying, which was seeing hesitancy in the market and a decline in sales counts and properties were spending longer on the market before selling compared to this time last year.
"Agents say this cycle of the market is a challenge as they guide buyers and sellers through a changed landscape and a stronger negotiation process."
Property sale numbers
The greatest annual percentage decreases were:
• Auckland decreased 43.3% annually from 2853 to 1618 • Bay of Plenty decreased 41.3% annually from 458 to 269 • Gisborne decreased 39.5% annually from 43 to 26 • Taranaki decreased 39.4% annually from 198 to 120. Source: Real Estate Institute of New Zealand
