Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the increase in values was driven by supply and demand. Photo / File
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the increase in values was driven by supply and demand. Photo / File
Tauranga house values have jumped 7.3 per cent year-on-year and now exceed the previous market peak in 2007.
QV's June residential price movement index showed Tauranga average home values increased 7.3 per cent year-on-year to $485,561 - 0.8 per cent higher than the previous peak in 2007.
Values in Western Bay of Plenty also increased - up 4.8 per cent to $435,732.
Sellers were going to auction to take advantage of rising demand and values while the trend was causing "a degree of panic" among local buyers trying to get on to the property ladder, valuers said.
New homeowners Stefan and Vicki Nogaj said they were relieved to have secured a home in a tough market for first buyers.
They bought their first home two weeks ago and said they feel blessed to have done so. QV homevalue Tauranga registered valuer David Hume said a higher proportion of properties were being sold at auction, because the rising values meant it was often difficult to price properties.
"This has created a degree of panic for local buyers not wanting to get priced out of the market, with the $300,000 to $500,000 range seeing the biggest demand, also fuelled by historically low interest rates.
"Homes in Tauranga and Papamoa are now selling much more quickly than they have for several years and value levels are now considered to be at or above the 2007 peak."
Mr Hume said demand outside Tauranga city was also strong, especially in Omokoroa, Te Puke and Te Puna where demand for homes in the $600,000 to $750,000 range had increased.
Telfer Young Valuers Property Advisors Tauranga director Shayne Donovan-Grammer said valuations done three months ago "in some ways don't give a lot of indication of the value because the market is moving so quickly".
There was incredible pressure in some areas including Papamoa, Mount Maunganui and Matua, he said, and in some cases values were being set by the availability of credit, not what the market was doing.
"If they can lend more money then they can pay more so that is helping in a way to set new benchmarks."
This could happen in a competitive situation like an auction.
Ross Stanway is the chief executive of Eves and Bayleys Real Estate. Photo / John Borren
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the increase in values was driven by supply and demand. There was no single reason for the increase but there had been considerable business growth in the region, with more young families moving for job and business opportunities.
"We see that every week in our auction room and outside of the auction room. Our people are selling a significant amount to out-of-town buyers that are younger people with families, good careers and good jobs to come to, or they are bringing businesses here.
"That bodes well for our future ... and is a really good sign for a well-balanced community."
Greg Purcell, franchise owner of Ray White Realty Focus in the Mount and Papamoa, said the national property boom had taken a "shape of its own".
"It is not on the back of an economic boom but on the back of old-fashioned supply and demand, which is a first in my real estate lifetime."
First National Mount, Tauranga and Omokoroa owner Anton Jones said first-home buyers were being priced out to a degree. Stock was not being replenished as unprecedented levels of Auckland buyers purchased homes. He expected the number of Auckland investors to increase after new LVR rates were introduced later this year as "they look elsewhere and come to the regions."
Tauranga Harcourts general manager Nigel Martin said low stock and competition was putting pressure on prices. About 50 per cent of its buyers were from Auckland.
Countrywide Real Estate Te Puke branch manager Russell Doughty said it was "flat out".
"There is a huge demand for rental properties in Te Puke and the market has been very strong in residential and rural."
Patience pays off for first home buyers
Stefan and Vicki Nogaj bought their first home two weeks ago and say they have been blessed to secure a home in an increasingly tough market for first-home buyers.
Stefan and Vicki Nogaj have finally bought a house after searching for three years.
The couple had been searching for a four-bedroom home for three years for them and their three children.
"This is going to leave a lot of good, hard working families out. If we hadn't had this opportunity with our friends we would still be looking and struggling."
He was working fulltime and his wife was working part-time and he said that was the reality of affording your first home.
"To own your own home, you've got to have two incomes or at least one and a half."
They did not want to buy out of their budget, tying up their money and taking opportunities away for their children so they waited until the right house came along, Mr Nogaj said.
