A Mount property sold last month made the biggest resale profit of $2.4 million during the last quarter of 2018. Photo / File
A Mount property sold last month made the biggest resale profit of $2.4 million during the last quarter of 2018. Photo / File
A Mount Maunganui property sold last month made the biggest resale profit of $2.4 million during the last quarter of 2018, new data shows.
CoreLogic's latest Pain and Gain report showed a 1960s property on Oceanbeach Rd bought in February 2014 sold for $4.5m in December 2018 — $2.4m above the purchase price in almost five years.
The property was a four-bedroom, three-bathroom home on a 1200sq m section.
The median profit made by Tauranga residents who sold their home between October 1 and December 31 was $240,000 per property - the city's gross profit from sales was $131,710,509.
The median for Tauranga properties sold at a loss was $8500, with a gross loss of $293,000.
Properties in the city that resold for a gross profit in the December quarter were held for a median 5.9 years, while houses resold at a loss were owned for about two years.
CoreLogic senior property economist Kelvin Davidson said a general rise in property prices had affected the rise and fall of profits made at resale.
Average values had risen to $722,000 from $424,000 in the last six years, Davidson said.
"If a homeowner has held onto their property for any reasonable period of time, it's almost inevitable that they will have made a solid gross profit," he said.
"Prices will have risen generally due to the solid economy in the area and the desirability as a place to live."
Davidson said the company's buyer classification statistics showed Tauranga's market activity was driven mostly by existing owner-occupiers.
"These are people who have already built equity in the housing market and can afford those higher prices."
OneRoof editor Owen Vaughan said as the Tauranga market continued to plateau, the level of profits enjoyed in previous years would start to rapidly come down.
"We will start to see pinch points for those who have bought in the height of the market," he said.
However, Vaughan said well-located properties were always going to be held in high value and would still be able to command a high profit.
Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said in the last four years there had been "phenomenal capital growth" in Mount Maunganui, particularly along Oceanbeach Rd.
But this property's $2.4m profit at resale was "one out of the bag".
Anderson said profit made at resale was due to a number of factors, including any renovations made on a home from the purchase date.
Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys. Photo / File
General manager of Tremains Bay of Plenty and Waikato, Anton Jones, said there had been high demand for property across Tauranga in the last six years.
There had been a big shift in people moving from the main cities to places like Mount Maunganui in search of the lifestyle, Jones said.
"The demand for Tauranga property in the last six years has been massive, which is what drives house prices and that is where the big gains are made."
General manager of Tremains Bay of Plenty and Waikato, formerly First National, Anton Jones. Photo / File
Ray White Realty Focus Mount Maunganui and Pāpāmoa franchise owner Greg Purcell said the bigger Tauranga got the smaller the Mount became in terms of the city make-up.
"There is only so much Mount Maunganui, that is why we are seeing those land price rises," he said.
"If they don't buy that property now, there might not be another one like it again."
