City home values increase

Three months ago, first-home buyers and investors were snapping up lower end properties, while recently there had been more activity in the upper end, with 20 sales over $700,000 last month. Photo / John Borren

Home values in Tauranga City have increased almost 4 per cent in the past year, pushed up by the low number of homes on the market, industry experts say.

Values in Tauranga have increased by 0.2 per cent over the past three months and 3.8 per cent year on year.

They are now 5.5 per cent below the previous peak of 2007, with an average value of $422,071. Values in the Western Bay of Plenty increased 2.5 per cent over the past three months and 6.2 per cent since November last year, but remain 6.3 per cent lower than 2007 levels, with an average value of $455,196.

LJ Hooker Tauranga principal Stephen Pepper put the rise in value down to low stock numbers but said he expected prices would only continue to go up. "What we're seeing is that there's less stock on the market.

"The buyers are aware that, as a result, there have not been the choices there have been in the past. They are making decisions more quickly than they used to," he said.

"Every time we get a vendor into a multiple offer situation, the prices are better. Prices are going up because there are fewer properties in the market."

The type of property selling had also changed, he said. Three months ago, first-home buyers and investors were snapping up lower end properties, while recently there had been more activity in the upper end, with 20 sales over $700,000 last month.

Despite that, October had been the biggest month in more than a year, with a total of 133 sales in the region, Mr Pepper said. "I would expect November to be higher," he said. "We've had a record month this month. We're about 30 per cent up on our figure from October."

The number of listings last month had increased by 10 per cent and he expected more to come on to the market during summer, which would swing the market more in favour of the buyer, he said. Tauranga Harcourts general manager Nigel Martin agreed the number of properties for sale was having an effect. The stock on the market was not increasing, which was holding the market back from the 2003-04 "boom times" and the competition was also pushing prices up, he said.

"Some areas of town have increased more than others and those are the areas attracting out of town buyers."

Mr Martin said it was encouraging to see an increase as the build-up to a similar 2007 peak had been slow. "Yeah, we're getting close to it but 2007 was effectively seven years ago, so it's taken a long time to recover." He said Auckland had overtaken its 2007 peak, so Tauranga was "lagging behind" other cities' increases.

Ross Stanway, chief executive of Realty Services which operates Bayleys and Eves, said the 3.8 per cent followed similar figures over the past three or four years. "That does indicate there's been steady increases but one that's not ramping away, like it is in Auckland or Christchurch.

"That's a good thing, it's a good, steady market."