Property booms in Rotorua in 2018, price rise set to continue

How the housing markets in each of the main centres are performing.

In just under a year, Rotorua's median residential house price has increased by $55,000 and real estate experts believe the rise is set to continue.

The year in review from the Real Estate Institute of New Zealand (REINZ) shows the median price in 2018 started at $365,000, reached a record high in June of $435,000 and settled at $420,000 in November.

According to the data, in the first 11 months of 2018, Rotorua's median house price increased by 15.1 per cent.

In comparison, the national median sale price increased 10.6 per cent in the same timeframe - from $520,000 to $575,000.

Harcourts sales manager Colville Barbour said 2018 had been a sellers' market.

"This follows on from a couple of years of strong growth and is reflected in the median sale price.

"Well-priced property isn't lasting on the market and often attracts multiple offers. This is great news for vendors as the extra competition can achieve better than expected prices."

Barbour said properties sold in 32 days on average and between 80 and 120 houses were sold every month.

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"Rotorua still offers value and it is expected that 2019 will be another strong year for sales."

Barbour said the Rotorua market had something for everyone and low interest rates helped buyer confidence.

"First-home buyers are active at the lower end of the market but continue to compete with investors and can struggle with deposits.

"The market continues to attract investors both from out of town and locally who see value in the returns they can achieve.

"The mid and top ends of the market have produced some outstanding sales."

REINZ chief executive Bindi Norwell said many of the country's regions had experienced "significant growth" in the past year.

"Demand for good housing stock continues to exceed the supply of houses.

"We're still seeing a number of Aucklanders, particularly first-home buyers, move to the regions where they can get more for their money," Norwell said.

"This effect continues to drive up prices in the regions and until we address the fundamental supply issues, we believe house prices will continue to increase in the short to medium term."

Norwell said Rotorua was still more affordable than other Bay of Plenty areas as the median price remained below $500,000.

"This lower price point also means families can get a little more land than you might get in other areas within the Bay, yet there are still good schools and transport options.

"When you combine that with the strong business growth and its ability to reach other areas of the Bay within an hour's drive time, you can see why it remains a popular place to buy."

Mortgage Centre owner Graeme Leigh said the business had loaned more than $24 million in 2018, up 17 per cent on the previous year.

The average loan size was $345,000.

Leigh said a shortage of listings and rising prices had made the year difficult for first-home buyers.

"The shortage meant there were multiple offers. Sometimes my clients missed out because when you've got multiple offers you may have cash buyers.

"With the median price over $400,000 that creates another problem for first-home buyers because they want to access a home start grant but the maximum price for the grant in this region is $400,000.

"That figure has really become the new entry level."

Looking ahead, Leigh expected to see more loans of more than 80 per cent of the house value, and more investors.

First National principal and Rotorua REINZ spokeswoman Ann Crossley said the 2018 property market had been strong and a shortage of stock had driven demand.

Crossley hoped pockets of development would ease demand and she believed 2019 would be another positive year for property.

Professionals McDowell co-owner Steve Lovegrove said 2018 had been "an interesting year".

"We've seen some highs and lows. The high has been price increases and the lows have been stock availability.

"Both have been at the extreme end of what we've seen for a really long time in Rotorua and I think they relate to each other."

Lovegrove said Rotorua was an attractive place to live and that was contributing to the demand for housing and he believed prices would continue to rise incrementally in 2019.

"All in all we're on the up and up. Looking forward that's quite sustainable. Can we repeat 2018 in terms of solid growth? I think we can."

REINZ top-selling suburbs with 10 or more sales
1. Lake Tarawera with a median price of $761,250 (10 sales)
2. Lynmore with a median house price of $643,000 (52 sales)
3. Springfield with a median of $557,000 (57 sales).

Median value by suburb
Fairy Springs $370,000 (30 sales)
Fenton Park $389,500 (20 sales)
Fordlands $205,000 (17 sales)
Glenholme $481,000 (63 sales)
Hamurana $803,500 (17 sales)
Hannahs Bay $341,500 (6 sales)
Hillcrest $426,000 (22 sales)
Holdens Bay $391,500 (12 sales)
Horohoro $613,000 (2 sales)
Kawaha Point $491,000 (19 sales)
Koutu $311,000 (21 sales)
Lake Ōkareka $793,000 (7 sales)
Lake Rotoma $365,000 (7 sales)
Lake Tarawera $869,000 (10 sales)
Lynmore $634,000 (52 sales)
Mangakakahi $350,000 (51 sales)
Mourea $292,000 (7 sales)
Ngakuru $583,000 (8 sales)
Ngapuna $272,500 (0 sales)
Ngongotahā $409,500 (64 sales)
Ohinemutu $408,500 (one sale)
Ōkere Falls $565,000 (5 sales)
Ōwhata $414,000 (88 sales)
Pukehangi $397,000 (66 sales)
Rerewhakaaitu $440,000 (one sale)
Rotoiti Forest $469,000 (four sales)
Rotorua Central $344,500 (14 sales)
Selwyn Heights $367,000 (16 sales)
Springfield $541,000 (57 sales)
Tihiotonga $635,000 (seven sales)
Tikitere $889,000 (19 sales)
Utuhina $409,000 (21 sales)
Victoria $377,000 (21 sales)
Waikite Valley $652,000 (three sales)
Westbrook $484,000 (47 sales)
Western Heights $331,000 (33 sales)
Whakarewarewa $331,000 (two sales)
Source: Oneroof.co.nz