OneRoof: 10 Tauranga suburbs drop in property value

Average home values in 10 Tauranga suburbs dropped in the last three months. Photo / George Novak

Tauranga is feeling "the squeeze" of a regionwide property slowdown as average home values in 10 suburbs dropped in the past three months, new data shows.

But an independent economist says first-home buyers considering when to put an offer in should not try to predict when the property-price fall would hit bottom.

The latest report from OneRoof and its data partner Valocity shows the average property value in Ōtumoetai fell 3.2 per cent - or $39,000 - to $1,188,000 in the last quarter.

Average property values in Ohauiti and Pāpāmoa Beach dropped 1.6 per cent - or $21,000 - from $1,261,000 and $1,263,000.

Judea, Parkvale, Bellevue, Maungatapu, Welcome Bay, Matua and Gate Pā also experienced average property falls.

At the top of the market, average property values in Pāpāmoa grew 4.9 per cent - or $52,000 - to $1,111,000. Pyes Pā rose 2.1 per cent - or $26,000 - to $1,247,000.

OneRoof editor Owen Vaughan. Photo / NZME

OneRoof editor Owen Vaughan said value growth in the Bay of Plenty slowed to 1.1 per cent in the past three months.

"Ōpōtiki is bearing the brunt of the market slowdown in the region."

The average property value in Ōpōtiki fell 2.4 per cent ($15,000) to $617,000 in the last three months.

"Growth in Whakatāne, Western Bay of Plenty and Kawerau was positive, but at a rate of around 1 per cent.

"Also feeling the squeeze is Tauranga, where the average property slid 0.2 per cent to $1.237m over the same period."

However, Vaughan said Rotorua was keeping the region "out of negative territory" with the city's average values growing 5.6 per cent.

"The city's average property value is now $2 shy of hitting $800,000, almost double what it was five years ago."

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Tremains Bay of Plenty managing director Anton Jones said the value drops were not unexpected given the market had slowed.

"Things have certainly tightened up.

Tremains Bay of Plenty managing director Anton Jones. Photo / George Novak

"We have been on massive highs. You know where the top of the market is when things start to slow down."

Jones said, on one hand, price drops were good for first-home buyers but on the flip side interest rates were rising.

For vendors, Jones said it was a good idea to consider "realistic" offers now as buyers might not be able to afford to offer the same in a month's time.

"Sometimes it is better to have certainty and take the deal if it is realistic."

Property Brokers regional manager for the Bay of Plenty, Simon Short, said anecdotal evidence was the belly was falling out of the market and buyer activity had fallen.

But, he said, values were holding the line.

"We have pockets of the market that are still performing very well. Pāpāmoa, Mount Maunganui and Pyes Pā are all showing positive value growth."

Property Brokers regional manager for the Bay of Plenty, Simon Short. Photo / Supplied

Short said on the flipside buyers were sitting back "poised to commit" because of rising inflation and interest rates.

"There is a degree of nervousness."

However, he said there was more stock on the market than ever before, giving buyers more to choose from.

Independent economist Tony Alexander said he expected to see property prices falling "pretty much everywhere" eventually.

"My expectation for the regions which are still showing increases [is] there are still decreases that are likely to come along as buyers generally are backing away all around the country."

Alexander said generally the Bay of Plenty and Waikato had seen strong price gains since about 2015 and were due for a "bit of a correction".

"The extent of the correction just increased because of the pandemic surge in prices everywhere.

"I don't think people should be surprised if there are falling prices in some areas at the moment and rising prices in others, where there is probably a bit of catch up."

Independent economist Tony Alexander. Photo / Fiona Goodall

It did mean first-home buyers may eventually be able to enter the market at lower prices than last year, he said.

"The trick, of course, is figuring when do you get back into the market. My advice is try not to get too focused on trying to pick the bottom in the market.

"Instead, focus on the fact more properties are coming onto the market, so there is more to choose from and a greater chance a person is going to find what they want to suit their needs.

"I would focus on the improving choice, rather than trying to time the bottom of the cycle."