Rotorua real estate agents have been rushed off their feet with multi-offers proving the "new norm" despite new data showing a slow recovery post-Covid-19 lockdown.

Agents say the busy market has been fuelled by first-home buyer activity but demand was outstripping supply with new stock proving hard to come by.

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The OneRoof-Valocity Covid-19 index measured the change in median property values since New Zealand went into lockdown on March 25.

Valocity director of valuation and innovation James Wilson said the Rotorua market entered lockdown up 12.5 per cent according to the Valocity Covid-19 Index.

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Valocity director of valuation and innovation James Wilson. Photo / File
Valocity director of valuation and innovation James Wilson. Photo / File

However, the market had since softened, with index values down 0.7 per cent.

"Most suburbs are experiencing subdues value levels, however, we do see some signs of life in Owhata and Glenholme, which remain buoyant increasing 10.2 per cent and 4.8 per cent since lockdown.

The median value for Rotorua was now $495,000, up from $450,000 12 months ago.

Wilson said sales volumes have also remained suppressed since lockdown, with the average monthly number of settled sales falling from 80 per month to 45 per month in the last six months.

"Buyers appear to have adopted a cautious wait-and-see approach, especially evident among investors as they wait to see what happens to the area.

"This is most evident among investors whose share of new mortgage registrations has dropped to 19 per cent, whereas first home buyers share of new mortgages have increased. to 39.2 per cent."

OneRoof editor Owen Vaughan. Photo / File
OneRoof editor Owen Vaughan. Photo / File

OneRoof editor Owen Vaughan said Rotorua's story was one of declining growth and values mainly because the economy was reliant on tourism.

"Rotorua's market was a lot more challenged than elsewhere which will make it harder for the market to get back on its feet."

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Professionals McDowell Real Estate principal Steve Lovegrove said buyer activity in July had been "very high" with eight out of 10 properties ending in a multi-offer.

However, he said the number of properties available in the last few weeks had been "static" which meant any new property on the market was being matched by a sale.

Professionals McDowell Real Estate principal Steve Lovegrove. Photo / File
Professionals McDowell Real Estate principal Steve Lovegrove. Photo / File

While some buyers were not making a move as willingly as before, Lovegrove said there was still more buyers in the market than expected.

"We haven't seen any backing off of buyer activity," he said. "But if the market had more we would be selling more."

Homes in the $400,000 to $600,000 price bracket had proved popular among first home buyers and there was "healthy" interest in the $1 million to $2 million range, he said.

First National Real Estate Rotorua principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley. Photo / File
First National Real Estate Rotorua principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley. Photo / File

First National Real Estate Rotorua principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley said a drop in sales volumes post lockdown was "completely expected" but since returning to normal demand had been strong.

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"There are buyers coming back and listings coming on."

But she said the city's stock level remained under pressure and banks continued to be tougher on lending.

"We have still got New Zealanders returning which is continuing to put pressure on but people have to live somewhere."

Harcourts Rotorua sales manager Colville Barbour. Photo / File
Harcourts Rotorua sales manager Colville Barbour. Photo / File

Harcourts Rotorua sales manager Colville Barbour said lockdown was obviously disruptive as property viewings were not possible.

But his team had seen a return to prior to lockdown market conditions, with strong buyer demand and good sales volume across all residential property types.

"There, however, also remains a shortage of stock."

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Barbour said buyer activity was across the board with first-home buyers and investors prevalent and multi-offers were common.

"It is difficult to say what will happen in the future, but what we can say is that with low interest rates, high demand and low stock levels there may not have been a better time to bring your property to market than now.

"Moving forward with market fundamentals remaining the same there is no reason to expect this to change."

Tremains Rotorua sales manager Megan Davies. Photo / File
Tremains Rotorua sales manager Megan Davies. Photo / File

Tremains Rotorua sales manager Megan Davies said the market was not long out of action.

"We have experienced charged interest in properties below $500,000 with up to 40 groups through open homes and multi-offers being the norm.

"This is also reflective of a market of first-home or investment buyers who want to be in but a lack of available stock."

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Davies said sales in a lot of areas have been low because there is a continued lack of stock but there was continued interest in the Western Heights and Pukehangi areas.

A few more dips and rises were to be expected, Davies said, with the election, mortgage holidays and wage subsidies ending.

"We may see the market steady but I don't see it bouncing too high this year...," she said.

"We believe that there will always be a good market in Rotorua and the influx of out of town buyers looking around has started again since lockdown.

"People are looking for places to buy that will become future holiday destinations for family."

Chief executive officer of Bayleys and Eves Realty Bay of Plenty, Heath Young. Photo / File
Chief executive officer of Bayleys and Eves Realty Bay of Plenty, Heath Young. Photo / File

Chief executive officer of Bayleys and Eves Realty Bay of Plenty, Heath Young, said the enforced lockdown essentially suspended the property market.

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"When it became apparent that we had beaten the virus and were returning to alert level 1 far quicker than thought, the pent up demand for property along with buyers' confidence meant property transactions have recovered a lot quicker than thought," he said.

Young said demand for property in the Bay was largely unaffected by the international border being closed and there were still many people moving from Auckland and elsewhere and returning from overseas.

Despite a positive trend Young said it was difficult to look ahead.

"There is a sense of false economy operating at present in terms of wage subsidies, mortgage holidays and this surge that has been created through the suspending of the property market through lockdown."

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Rotorua suburbs ranked by 12-month value change

Mourea
Latest median value: $462,500
12-month change (%): 31.21%
Highest settled sale since start of 2020: N/A
Change since March 25 (%): -0.70%

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Lake Tarawera
Latest median value: $1,065,000
12-month change (%): 24.56%
Highest settled sale since start of 2020: $2,125,000
Change since March 25 (%): -0.70%

Lake Okareka
Latest median value: $975,000
12-month change (%): 22.64%
Highest settled sale since start of 2020: $1,310,000
Change since March 25 (%): -0.70%

Fordlands
Latest median value: $280,000
12-month change (%): 21.74%
Highest settled sale since start of 2020: $335,000
Change since March 25 (%): -0.70%

Hamurana
Latest median value: $945,000
12-month change (%): 20.38%
Highest settled sale since start of 2020: $1,180,000
Change since March 25 (%): -0.70%

Ngapuna
Latest median value: $350,000
12-month change (%): 18.64%
Highest settled sale since start of 2020: $290,000
Change since March 25 (%): -0.70%

Hannahs Bay
Latest median value: $430,000
12-month change (%): 17.10%
Highest settled sale since start of 2020: $430,000
Change since March 25 (%): -0.70%

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Rotorua
Latest median value: $415,000
12-month change (%): 16.90%
Highest settled sale since start of 2020: $1,080,000
Change since March 25 (%): -0.70%

Koutu
Latest median value: $375,000
12-month change (%): 14.50%
Highest settled sale since start of 2020: $530,000
Change since March 25 (%): -0.70%

Fenton Park
Latest median value: $440,000
12-month change (%): 14.29%
Highest settled sale since start of 2020: $505,000
Change since March 25 (%): -0.70%

Source: OneRoof/Valocity