Values continue to skyrocket

Rotorua. PHOTO/FILE

Rotorua's property values are continuing to skyrocket - but there may be a glimmer of hope for first home buyers keen to get on the property ladder.

Figures released yesterday showed property values across Rotorua jumped 27.1 per cent in the last 12 months and 9.3 per cent in the past three months.

The latest QV residential property value index for August showed the average current value of a residential property in Rotorua is now $347,966.

Property values now sit 18.5 per cent about the 2007 market peak.

Steve Lovegrove, the owner of McDowell Real Estate Professionals Rotorua, said the new property values were fantastic.

Mr Lovegrove said it meant people who hadn't made a move for the last few years could now have confidence to move to the next home - whether it be upgrading, downgrading or moving to a more suitable property.

"It is the tipping point. The news and those kind of values will see that kind of migration that will sustain us through the summer."

He said some investors had "backed off" due to the new investment restrictions which meant there was more opportunity for first home buyers who weren't having to compete with "cashed up" investors.

However once they had re-established their financial arrangements he expected them to re-enter the market.

Mr Lovegrove said an unusual thing he had noticed in recent weeks was sellers placing conditions on buyers.

"They are saying 'yes you can buy my home as long as I can find something else'."

Real Estate Institute of New Zealand spokeswoman for Rotorua and First National principal Ann Crossley said new borrowing regulations had impacted investors.

She said they her company had listed three properties recently which would have been perfect for investors but had instead sold to first home buyers.

Ross Stanway, chief executive of Realty Services, which operates Eves and Bayleys Real Estate, said without a doubt more people were looking at Rotorua as a place to invest or live - and the figures reflected that.

He said the increase in value supported what they were seeing both at Bayleys and Eves with increasing prices and volumes.

Mr Stanway said part of that was the wider Bay of Plenty appeal.

He said there was still strong local demand with people moving within Rotorua either upsizing or downsizing but there was also interest from Aucklanders and people from other parts of the Bay.

Mr Stanway said his businesses hadn't seen any winter slowdown.

Nationwide residential property values for August increased 14.6 per cent over the past year. Values rose by 6 per cent over the past three months and are now 47.8 per cent above the previous market peak of late 2007.