Buyers flock back to Rotorua property market

FILE

Big numbers of buyers are returning to the property market in Rotorua, after being off the scene for at least six months.

New data compiled by CoreLogic shows 8 per cent of home buyers during July to September of this year were "re-entry" purchasers.

CoreLogic research analyst Nick Goodall said the level of housing market re-entry in Rotorua - people re-entering the property market after an absence of at least six months - was almost double that of the national rate.

"The latest quarter saw the largest per cent of purchases to this group in the 10 years analysed." Mr Goodall said this was equalled only in the last three months of 2012.

Phil Hereford, sales manager at Professionals McDowell Real Estate, said people had returned as they realised the market had stalled and activity reduced over the past seven years.

"They realised prices are well down, values are extremely good, and I think we're on the verge - there's definitely increased activity right across the board.

"People are realising if they are going to make a move, now's the best time to get into it before a lift in values due to activity."

The CoreLogic figures also show 19 per cent of Rotorua homes purchased in the third quarter of this year went to first home buyers - 2 per cent more than the national rate. This bucked the nationwide trend of experienced home buyers dominating sales.

However, the figure was down on the rates of first home purchase before lending restrictions of 2013.

Mr Hereford said banks had used seminars and advertising well to overcome the Reserve Bank's loan to value ratio restrictions. "They're making themselves readily available to assist people through lending officers. They're more proactive than what they have traditionally been.

"There was a slowdown effect created by the LVR regulations. That definitely did have an effect. "If you take our Rotorua median price of around $240,000, to have gone from a 5 per cent deposit requirement 24 months ago, to a $10,000 to $40,000 deposit requirement.

"There's been a trend in recent months, a loosening up to get first home buyers over the mark and into a position to buy. I've heard in the grapevine there could be further changes to that criteria, especially with regards to first home buyers who might look at buying new-built homes. At this stage it's a speculation, I don't think it's come to fruition yet."

Encouragement for first home buyers has also come from mortgage brokers, Mr Hereford said.

Bayleys Rotorua manager Beth Millard said she'd noticed activity was "definitely up" and there was a more positive vibe around.

"Activity is up at open homes and that's always a good indicator that the market is on the move. We've also had really good attendance at the last auctions."

Eves Rotorua manager Tony Stack agreed signs were positive.

"First home buyers are looking at the market again, although not in plentiful numbers."

He said there had been an increase in buyer inquiries as well as product to the market, and investors from inside and outside of Rotorua were looking at investing.