Rotorua house prices climbing but sales slow

Rotorua First National principal Anne Crossley says the market in the city was steady. Photo / Andrew Warner

Bargain hunters on the lookout for a cheap Rotorua home will have to raise their budgets according to new figures.

The median house sale price in Rotorua has jumped by more than $80,000 in one year and sales have slowed, new data shows.

But the growth in population and an increase in demand for houses is expected to keep the market strong, experts say.

New figures from the Real Estate Institute of New Zealand reveal the median house price in Rotorua last month was $409,000 compared to $325,000 in November 2016. The median in October this year was $355,626.

Sales volumes had also dropped with 91 sales in November, down from 136 in November last year.

First National Rotorua principal Anne Crossley said there were 30 sales valued at more than $500,000 which would have driven up that median.

A home in the district had also sold for more than $1 million last month while there were not many unit or townhouse sales, she said.

The climb in prices was good news for Rotorua property owners but there was good news for buyers too.

"We are going into the Christmas period with more stock so that is better for buyers.

''I think it is a positive end to the year with a bit of a pick up around the election.''

Crossley said she thought the market would remain stable going forward as the major drivers had not changed.

''Our market has not changed, we have a growth in population and not a growth in supply. And although there are some new sections coming on it takes quite a while for that new section to be a new house.

''The market is about supply and demand.''

Simon Anderson, chief executive of Realty Services which operates Eves and Bayleys, said last year there were more investors in the market so that had affected sale volumes which were returning to normal.

Anderson said it was also important to remember the median price was ''middle of the range''.

''That investor market was strong and now there is a total change ... there has also been a whole shift in the value of properties which lifts the median. More business or salary people are looking to buy, move or commute to Rotorua which is very positive.''

In 2015 about 90 to 120 sales a month was the average, he said.

LJ Hooker principal Malcolm Forsyth said the market was showing consistency.

''The prices aren't coming down, they are holding and inching up a little bit.''

The most active price bracket for LJ Hooker Rotorua was from $350,000 to $450,000 but it had sales ranging from $200,000 to $900,000 last month, he said.

REINZ Bay of Plenty Regional director Philip Searle said as the warmer weather hit the Bay of Plenty it was seeing new stock coming to the market and sales had improved accordingly.

''As a result, we're seeing good prices being achieved and lots of keen buyers across the region. With the LVR changes due in the New Year, we anticipate an increase in investors and first home buyers as the restrictions begin their gradual ease.

''Otherwise, it's business as usual over the summer months,'' he said.

Median house prices
Rotorua November 2017 - $409,000 November 2016 -$325,000
Kawerau November 2017 - $178,000 November 2016 -$145,000
Opotiki November 2017 - $290,000 November 2016 -$227,000
- Source REINZ