Property prices in Rotorua remain steady, with only 0.6 per cent sold at a loss last quarter. Photo / Andrew Warner
Property prices in Rotorua remain steady, with only 0.6 per cent sold at a loss last quarter. Photo / Andrew Warner
Rotorua home sellers averaged a profit of $410,000 in the last quarter of 2021.
That's according to new CoreLogic analysis giving insight into the record-breaking property market boom, which some experts say now shows signs of cooling.
The latest Pain and Gain Report for October to December says just 0.6per cent of sold Rotorua properties made a loss.
The median gross loss for the city was -$65,000, against a median gross profit of $410,000.
CoreLogic chief property economist Kelvin Davidson said, like the rest of the country, Rotorua's property market has seen a "boom".
He expected strong prices to continue, despite what some economists said.
"I don't believe the property prices in Rotorua will drop any time soon."
There were no indications locally that price strength wasn't going to remain, he said.
Rotorua Professionals McDowell Real Estate co-owner Steve Lovegrove. Photo / Andrew Warner
In the last three months of the year, the property with the highest gain was on Wattle Grove Rd at Lake Ōkareka.
It sold for $1,785,000 in November, a gain of $1,055,000 from when it was originally bought 16 years ago.
The second highest gain was at $1,035,000 for a property bought just over three years ago on Okere Rd. This property was bought for $1,900,000 in December, up from $865,000.
Ray White Rotorua principal Anita Martelli said property values around the lakes had been increasing.
She said the market was strong, but people were more cautious and banks were taking longer for approvals.
Bayleys and EVES Realty Waikato, Bay of Plenty, Taranaki chief executive Heath Young said the data showing a high proportion of profit-making sales made sense.
"November and December, in particular, had large amounts of sales activity in the Bay of Plenty property market."
Bayleys and EVES Realty Waikato, Bay of Plenty, Taranaki chief executive Heath Young. Photo / Andrew Warner
He said contributing factors to these gains and levels of activity included consistent sales value growth over the past five years and counting.
"This includes 15 to 20 per cent sales price growth year on year for the past year alone in the Bay of Plenty."
The region had benefited from low levels of Covid-19 lockdown impacts last year, he said, meaning the property market had little relative disruption as it closed out the year.
He said many buyers and vendors had looked not only to get deals done by Christmas, but looked to limit the impact of new lending rules that came into effect in December.
Looking ahead generally, Davidson said despite the property market moving past its peak and beginning to slow, resale gains will likely remain elevated for some time.
"Even if property value growth slows sharply over the next three to six months as we think it will, the fact that most people have built up their gains over long hold periods means that the gross profits will still be large."
Nationally, loss-making resales had a median hold period of 2.5 years, down from 3.8 years in the three months before.
"This illustrates that essentially the only loss-makers in the final three months of 2021 were 'short holds', perhaps with the owners never intending to sell so quickly but being forced into it, and accepting a weaker price, by a change in life or financial circumstances," the report said.
