Greerton the hottest market in the Bay

Greerton is the up and coming Tauranga area according to figures showing average values in the suburb have increased most across the city.

Quotable Value figures released this week show the average value of a property in Greerton rose 9.3 per cent in the two years to June 2014, followed closely by neighbouring suburb Gate Pa on 9.2 per cent.

In the Western Bay, average values are up most in Te Puke, rising 7.5 per cent over the same two-year period.

The report showed values across all Western Bay and Tauranga suburbs had decreased since the 2007 property market peak, except Bethlehem, which rose 3.4 per cent.

At the end of October 2007 the average value of a Bethlehem property was $512,300, rising to $533,700 by July this year.

The greatest drop in values since the peak has been seen in Tauranga South, where prices have dipped 7.8 per cent and Pukehina where prices plummeted 23.9 per cent.

However, every suburb in the Western Bay and Tauranga has seen an increase in average property price in the two years to June this year.

Tauranga property experts say demand is pushing up prices at the lower end of the market and suburbs such as Greerton represent good value for money.

Tauranga LJ Hooker principal Neville Falconer said Greerton represented a reliable area to buy a home.

"Around Yatton Park, Pemberton Park to Pyes Pa. Those areas across the road from the racecourse they're very good and they've been reliable for years."

He said the uncertainty of commercial development along Cameron Rd may have slowed residential demand in Tauranga South over the past two years while he put the dip in Pukehina prices down to property owners being forced to sell holiday homes and discretionary property during the recession.

Ross Stanway, chief executive of Realty Services, which operates Bayleys and Eves, said areas such as Greerton and Gate Pa had come to the attention of buyers more recently.

"First-home buyers and investors are seeing those areas as representing very good value," he said.

They were also close to transport, shopping and the CBD.

In future, Tauranga prices would depend heavily on the supply of new homes in areas such as The Lakes, Papamoa East and Omokoroa, he said.

Harcourts Tauranga managing director Simon Martin attributed the increase in values in Greerton and Gate Pa to the Government's lending restrictions.

"If you take out a lot of the bottom sale prices then the average will go up so that's probably where that area's been affected," he said.

Greerton and Gate Pa had a good infrastructure and good value property at the lower end of the market, he said.

"For a young family there's great schools, great shopping and affordable homes," he said.

The experts agreed development was responsible for average values in Bethlehem outstripping the 2007 peak.

"A lot of the Bethlehem area, especially St Andrews, Bethlehem Heights, parts of north Bethlehem are starting to come on stream," said Mr Falconer.

The value of new Bethlehem properties was also high. "There's very little that is built intended to sell under $500,000," he said.