Rotorua median house prices could reach $1.4m in 20 years

Rotorua could reach a median house price of $1.4 million by 2039.

What will Rotorua's median price look like in 20 years time? OneRoof has crunched some numbers to help you work it out.

In 20 years' time the median Rotorua home is tipped to reach $1.4 million, according to new forecast data calculated by OneRoof.

But despite what might seem a hefty price tag, Rotorua will still be seen as affordable, according to experts.

The OneRoof predictions looked at the change in the median sale price for every territorial authority in New Zealand between 1999 and 2019 and applied the same percentage increase to current house prices.

The exercise was to see what the trajectory would look like if the market cycle from the past 20 years repeated itself over the next 20 years.

Owen Vaughan OneRoof editor.

OneRoof editor Owen Vaughan said first-home buyers were currently paying $700,000 to $1m in Auckland, so it was not too far fetched to predict the median house price in Rotorua could reach $1.4m in 20 years.

In Tauranga the median house price is tipped to grow even more, increasing by 2039 to $2.3m.

The average price of a house in Auckland could rise to almost $3m by 2039.

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The figures suggest Wairoa in Hawke's Bay will be the cheapest place to buy property in 20 years' time, with house prices there expected to rise to a still affordable $353,309.

The most expensive to buy will still likely be Queenstown - but buyers there may have to stump up $4.79m for a home, as opposed to about $1m now.

Vaughan said prices in Rotorua had leapt in the past five to 10 years yet it was still seen as affordable.

"I don't think it is far fetched to say Rotorua's prices will continue to soar but it will always be seen as a more affordable place to buy and almost a satellite city to the more expensive Tauranga."

Vaughan said at the end of every year housing market experts were asked to predict what would happen in the next one, but we thought we would go out on a limb and look at what house prices might look like in 20 years' time.

"The last 20 years have seen major changes to the housing market, with prices rising between 200 and 500 per cent for the majority of the country.

"Although there have been significant drivers in the market that may not be repeated over the next 20 years - such as high levels of immigration - it's possible that Kiwis will be paying the kind of prices that only the wealthy can afford now."

Tremains Bay of Plenty and Waikato general manager Anton Jones.

James Wilson, director of valuation innovation at OneRoof's data partner Valocity, said: "Trying to predict what house prices will be in 2020 is difficult enough, so our predictions for 2040 should be taken with a big grain of salt. However, you can analyse current and past performance of the property market to try to determine future trends.

"Strong demand has supported value growth over the past 20 years and our analysis of sale prices since the end of 1999 shows dramatic changes in the market. Many of our main urban centres, in particular, Auckland and Queenstown, are now unaffordable on an international scale. This is important as when affordability constraints begin to take effect it can have an impact on future value growth."

Tremains Bay of Plenty and Waikato general manager Anton Jones said property was always valuable.

"It's always going to go up, and down, but generally over a longer period, it goes up. Unfortunately, none of us have a crystal ball because if we did we'd all be rich but it's generally known it's a very valuable asset."

Jones said if you looked at the previous 20 years, property went up but it was always hard to tell how much it would go up by in the next 20 years.

Realty Group, which operates Eves and Bayleys, managing director Simon Anderson said the past often reflected the future but he said it was too hard to tell whether the predictions were accurate, given world event changes, government changes and immigration changes.

"If you went back to 1999 and said the median house price would increase in 20 years by 300 per cent, they would say 'whatever'. Now we are saying the same thing and maybe it's right."

He said history told us Kiwis loved owning their own homes, however, the new generation was different and liked to have things now, rather than later, which impacted on saving attitudes and ultimately their abilities to buy a house.

"But with interest rates the way they are now, there's no better time to enter the property market."