Homes are earning more money than the average worker in Tauranga

Tauranga's best-performing suburb was Mount Maunganui, where the median value has risen $41,000 to $877,000 in the 12 months to October. Photo / File

Mount Maunganui homes are earning more than the average worker in Tauranga.

OneRoof.co.nz's regional breakdown of CoreLogic NZ's data shows houses in Mount Maunganui are earning more than $2000 more a year than the median annual income.

Tauranga's best-performing suburb was Mount Maunganui, where the median value had risen $41,000 to $877,000 in the 12 months to October.

According to Statistics New Zealand, the median annual income is $38,700 as of 2016.

Broken down, the average Mount Maunganui home earned a little more than $112 a day in the past year to October, compared to $106 a day for the average worker.

This means it would take an average worker 386.7 days to earn the same amount a Mount Maunganui home does in a year.

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OneRoof editor Owen Vaughan said gains in Tauranga in the past year were marginal at best. Median values rose $17,717 on average, which reflected slower market activity.

Vaughan said Mount Maunganui earned the most of any Tauranga suburb and was also the city's most expensive because it had a higher value to begin with, rather than increased market activity.

He said the Mount homes could still gain $40,000-plus, despite not much changing in its market in the past year.

"While homeowners in high-value suburbs can take comfort that their properties are still earning a decent chunk of money even in a relatively flat market, the flip side is that their homes can drop substantially if values dip by just a few percentage points."

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CoreLogic senior research analyst Kelvin Davidson said homeowners looking to move into their next home were dominating the Tauranga market in terms of property purchasers.

"I suspect that the equity they've already accumulated will have given them plenty of fire power to pay that bit more for the next property and keep market values rising," he said.

Davidson said listings had been relatively low across the Bay of Plenty. However, a lack of choice for prospective buyers would have helped values to rise.

Ray White Realty Focus in Mount Maunganui and Papamoa franchise owner Greg Purcell said the reason for the increase in capital gain was the "non-replicable" land value.

"You just can't make another Mount Maunganui," he said. "It is one of a handful of iconic spots in New Zealand. It has got that holiday feel."

"The Mount is a destination and has been for a long time."

First National, Mount Maunganui, Tauranga and Ōmōkoroa owner Anton Jones said there was still plenty of demand in the Mount, but a lot less listings.

Jones said there were plenty of retirees in the Mount Maunganui and Tauranga areas, which contributed to the annual median income.

Tauranga Harcourts managing director Simon Martin said there was a "reasonably strong" demand for homes in Mount Maunganui.

However, he said limited land space for future development meant there were few new builds.

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said the Mount Maunganui market was a "very special market".

"A lot of it is discretionary income," he said. "It is a holiday place and a very desirable location."

He said real estate was driven over time by location and it was no surprise the Mount market had grown by $41,000.

Leona Smith in her Mount Maunganui home. Photo/Andrew Warner

Loving life in the Mount

Mount Maunganui resident Leona Smith has lived in Mount Maunganui for almost 20 years.

Her husband Graeme started a management role with Ballance and was originally commuting to the Mount from Hamilton before the couple made the move over.

Leona said, despite being a transient area with many holiday makers coming only in summer, the Mount retained a small village feel for 90 per cent of year.

"We love the awesome community, the environment and the location, which is why we have chosen to stay rather than move back to Hamilton," she said.

The Smiths also own a rental in Mount Maunganui because of its "desirable location, high demand for property and an ever-reducing availability of land".

"We realised that having investment properties at the Mount would be a smart move," Leona said.

"We purchased our rentals when we recognised the housing cycle was at an optimum point to buy. Of course the market could always take a downturn, but it is highly unlikely to reduce drastically in this area."

Leona's five favourite things about Mount Maunganui
• Going downtown at the Mount on a Saturday or Sunday afternoon and having a few drinks in the sun with friends/family at one of roadside bars, usually Brew Co, Latitude 37 or Fish Face with residents Bernie and his dog Jack!
• The beach, of course.
• Mauao, of course.
• The climate.
• Always love seeing someone walking along the street in a wetsuit with a surf board. You just don't see this in most other places.

Mount Maunganui:
October 2017: 836000
October 2018: 877000
Change: 4100 (4.9%)