Fordlands, pictured in 2019, is one of only two suburbs with a property value under $500,000 left. Photo / NZME
Fordlands, pictured in 2019, is one of only two suburbs with a property value under $500,000 left. Photo / NZME
Rotorua now has only two suburbs with a property value of under $500,000, new data shows.
The latest property report from OneRoof and its data partner Valocity shows the number of Rotorua suburbs with an average property value of less than $500,000 had dropped from 13 in September last yearto just two.
They were Fordlands and Ngapuna - with average property values of $398,000 and $458,000 respectively.
Whakarewarewa came a close third, with an average property value of $509,000.
Meanwhile, the top end of Rotorua's property market had claimed seven more suburbs with an average property value of more than $1 million - with another five on the way.
The suburbs to cross the million-dollar mark included Lake Tarawera ($1,634,000), Lake Okareka ($1,455,000) and Tikitere ($1,330,000).
Ngakuru ($964,000), Tihiotonga ($949,000), Horohoro ($942,000), Lynmore ($922,000) and Kapenga ($907,000) were close to reaching a million-dollar property value.
However, the suburbs hovering above the $1m mark have crossed the "milestone" and the bottom suburbs have also lifted.
"The expensive suburbs seem to have got more expensive.
"The idea that even in the regional markets that you're able to buy a house for less than half a million is becoming increasingly difficult."
Vaughan said the problem was there was not a significant pipeline of new builds to either replace the more affordable homes or to offer first-home buyers better quality homes at lower prices.
"It's not impossible. But you're talking sub-standard stock or on the city fringe, and your budget is going to blow out even more by doing the property up.
"Rotorua first-home buyers are double disadvantaged."
First National principal and Rotorua REINZ spokeswoman Ann Crossley. Photo / NZME
First National principal and Rotorua REINZ spokeswoman Ann Crossley said knowing there were only two suburbs under $500,000 was "crazy".
Crossley said the properties that had sold for less than $500,000 in the last few months had been two-bedroom homes that needed some work.
"You're talking half-a-million dollars for these types of houses."
It was becoming much harder for first-home buyers to get on to the property ladder, she said.
"The rents have gone up, and unless they find creative ways like buying in a group, using the bank of mum and dad, or some other leg up in the market, it's hard.
"Once they're in, they're fine. But it's getting on there that's the hard part."
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / NZME
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said Rotorua was a resilient city.
Anderson said the city was heavily impacted by the absence of international tourism and once it recovered there needed to be "all hands on deck" to bring Rotorua back to what it was pre-lockdown.
"But strong businesses are based there and it is a great location for growth."
There was still plenty of demand for property despite a shortage of listings with high interest in the lakeside suburbs where there were some "big sales", he said.
Rotorua Professionals McDowell Real Estate co-owner Steve Lovegrove. Photo / NZME
Rotorua Professionals McDowell Real Estate co-owner Steve Lovegrove said the city was still "value for money".
"It is geographically still very attractive. Rotorua represents a significant amount of potential."
The last three months had been a "rollercoaster" but the "normal seasonal lift" had returned. A lack of new builds was affecting prices, though, he said.
Lovegrove said the city was also feeling the "Auckland effect", with people eyeing up property for when they were out of alert level 3 lockdown.
"Never before has there been a bigger motivation for people to fly south."
The financial effect would be felt at the start of next year as people started to sell up due to financial struggles or moved to the regions for business opportunities, he said.
Heading into summer, Lovegrove said there was a sense of urgency as people rushed to buy and sell before Christmas.
"The atmosphere is quite high speed. It's a mixture of anxiousness and a sense that we might not have time."
Rotorua's average property value as of September 15, 2021, was $748,000 - up 26.8 per cent year-on-year from $590,000 in September 2020.
The annual growth surge put an extra $158,000 on the price of a typical house in Rotorua, the report said.
Valocity senior research analyst Wayne Shum. Photo / Supplied
Valocity senior research analyst Wayne Shum said the continued decrease in the number of sub-$500,000 suburbs continued to be driven by competition between investors and first-home buyers.
"Investors have been active in Rotorua since the first nationwide Covid-19 lockdown, particularly in the lower price suburbs.
"Policy changes in the treatment of interest deductibility may have an impact on investor activity in the area, specifically around the type of properties they are attracted to, potentially swinging in favour of new builds.
Shum said existing owners appeared to have also enjoyed equity gained from the rising market, enabling some to move up the property ladder into the $1m bracket.
Rotorua
Most expensive suburbs
Lake Tarawera $1,634,000 Lake Okareka $1,455,000 Tikitere $1,330,000 Ngongotaha Valley $1,318,000 Tumunui $1,303,000 Hamurana $1,198,000 Waikite Valley $1,092,000 Okere Falls $1,078,000 Waimangu $1,075,000 Matipo Heights $1,060,000 Rotoiti Forest $1,008,000
Most affordable
Fordlands $398,000 Ngapuna $458,000 Whakarewarewa $509,000 Koutu $545,000 Western Heights $553,000 Mangakakahi $557,000 Selwyn Heights $559,000 Mamaku $566,000 Lake Rotoma $567,000 Victoria $569,000 Fenton Park $580,000 Fairy Springs $592,000 Rotorua City $601,000 Hannahs Bay $614,000 Ohinemutu $621,000 Utuhina $623,000 Reporoa $627,000 Lake Okataina $634,000 Hillcrest $634,000 Pukehangi $656,000 Owhata $676,000 Holdens Bay $689,000 Glenholme $694,000 Mourea $696,000 Ngongotaha $705,000 Atiamuri $730,000 Sunnybrook $737,000 Pomare $756,000 Mihi $763,000 rerewhakaaitu $779,000 Springfield $830,000 Waiotapu $879,000
