First home buyers still struggling with Tauranga house prices: QV valuer

Tauranga looking towards Mount Maunganui from the air. File photo

In spite of a more "stabilised" housing market, first home buyers are still finding it hard to enter the Tauranga market, a valuer says.

The latest monthly statistics release by QV showed the city's house prices were up 3.3 per cent year on year but dropped 1 per cent over the past three month.

The average house value was sitting at $687,310, the third highest in New Zealand behind Auckland and Queenstown.

QV Tauranga registered valuer David Hume said the market for houses under $700,000 was more stabalised and some in the industry were describing it as a more normalised market.

"First home buyers are still finding it difficult to enter the market with, many saying the HomeStart grant...is too low for the Tauranga region."

According to the Housing New Zealand website, to be eligible for the KiwiSaver HomeStart grant in Tauranga the property you buy has to cost under $500k for an existing house and $550k for a new build.

The cap was lifted from $400k for an existing house and $450k for a new build on August 1, 2016.

Hume said demand remained very strong in Mount Maunganui, with a 716 square metre vacant site at 98 Muricata Ave selling recently for $1.65 million.

"The site previously sold in May 2015 for $1.15 million in what was already considered a hot market at the time."

The Western Bay market grew 5.9 per cent year on year and 2.1 per cent over the past three months. The average value in the district is now $626,120.

"The Western Bay of Plenty has seen more continued growth throughout 2018, with now a similar percentage increase as Tauranga from the previous peak in 2007," Hume said.

"Soaring Kiwifruit Orchard prices continue, with some prime established Gold orchards now achieving over $1,000,000 per hectare."