Rotorua properties make $22.9 million 'profit' in three months

Ray White Rotorua's Katherine Martelli (left) Mairead Cornille, Anita Martelli (centre) and James Alexander. Photo / Stephen Parker

Rotorua is a city that has come of age, according to Realty Group chief executive Simon Anderson.

His comment comes as new figures released by CoreLogic's ''Pain and Gain'' report show Rotorua homeowners banked a gross profit of $22.9 million from property sales in the last three months of 2017.

Nick Goodall, head of research at CoreLogic, told the Rotorua Daily Post, the figure was collated by comparing the sales of homes during October, November and December last year, to the price they had sold for previously.

"By comparing the most recent sale price to the home's previous sale price, we can determine whether the property resold at a gross profit or gross loss," Goodall said.

The report also showed the median profit from sales in Rotorua was $175,000 and stated Rotorua sellers had not booked any meaningful losses on resale.

The median profit increased from $150,000 in July to September to $175,000 in October to December 2017.

Anderson said he didn't put too much stock in the CoreLogic figures as there were other variables that came into play, but said Rotorua had enjoyed a positive property market for the past two years so it was not surprising to see positive numbers in the report.

"We have had growth in business, industry and employment," Anderson said.

"The CoreLogic figures reflect the positive real estate market."

He said there were many good things happening in the city, including new subdivisions.

"The business community and the Rotorua Lakes Council have put a lot into making Rotorua great. It is a city that has come of age."

Professionals McDowell Real Estate co-owner Steve Lovegrove said he did not agree with the word ''profit'' used by CoreLogic.

"Not in the commercial sense. The figures show people who have sold their home for more than they bought it for which is a reflection of house prices increasing in Rotorua."

He said it was good to see Rotorua recognised as one of the places where a buyer would likely make capital gain on a property.

"The figures are relevant in that they are relative to the market itself. People are seeing Rotorua as a good investment which creates confidence in the marketplace itself. For a buyer it's not going to be a case of counting their losses and moving on – nobody wants to buy an asset and lose money on it.

"It is good news for property owners; there is strength and value in properties and strength in the marketplace."

He added there was pressure within Rotorua to increase the supply of homes to meet the high demand.

"We need to take a bit of pressure off the supply otherwise prices will continue to rise and we will end up with more people on the street," Lovegrove said.

First National Rotorua principal Ann Crossley said it was not surprising to see Rotorua leading the charge from the regional centres.

"The figures, across the board, confirm our thoughts that the rest of the country has caught up with what a wonderful place Rotorua is and people are wanting to buy here," Crossley said.

"We've lost the negative reputation that Rotorua was once known for and are now seen as a highly desirable place to live.

"The town is great, the activities are great and the opportunities are great. The median profit from sales figure reflects that."

Ray White co-owner and principal Anita Martelli agreed the market had gone up in terms of property value, but said it would be hard to come up with an overall price and a median.

"However, we still have a good market in terms of growth and of interest. Open homes are still attracting large numbers and multiple offers are still happening," Martelli said.