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Tauranga’s average property value plunged by nearly $140,000 in the year ending February, OneRoof data shows.
The March property report shows the average value fell $137,762 to $995,667 in the city. In the Western Bay of Plenty the drop was not as steep but still fell by $98,933 to $1,353,800 over the 12-month period.
However, a data analyst said a lack of new housing stock could put the brakes on value declines as listing volumes across the country were falling.
No suburbs increased in value over the previous 12 months.
However, values in Pyes Pā and Tauriko in Tauranga and Anongatete, Athenree, Ōmokoroa, Pukehina, Te Puke, and Waihī Beach in Western Bay of Plenty had increased in the past three months.
Tremains Bay of Plenty managing director Anton Jones said it was “tough” to get deals over the line.
“Buyers are shying away from properties with problems, consenting issues and leaky buildings given the number that is available. A lot of people are hanging out for the right thing.
“It’s interesting because as soon as the right thing comes out, it seems to be what everyone wants and that property will go pretty well because it’s presented and priced well and have all the boxes ticked.”
Jones said people with properties on the market for a long time should make sure it was presented nicely and was relatively free of issues.
“That will be the first thing they look at, whether the property has any issues and how easy is that to resolve. Those with more issues tend to stick on the market for longer.”
REINZ regional director Neville Falconer said first-home buyers in Tauranga were beginning to make a comeback and owner-occupiers looking for properties at the top end of the market were showing the most interest.
”Salespeople throughout the Bay of Plenty say that this summer has caused much heartache for many people in the North Island and has impacted the entire country to varying degrees.
“People are now taking a hard look at the vulnerability of their properties in the Bay of Plenty.”
Data taken from the OneRoof-Valocity House Value Index on February 20 showed house values fell 7.7 per cent in Bay of Plenty since the market peak in February last year, but the rate of decline was easing.
The data also showed the number of new properties listed for sale in February down 25.9 per cent in Bay of Plenty year on year.
Head of valuations at Valocity, OneRoof’s data partner, James Wilson said the lack of new housing stock could put the brakes on value declines.
“Bay of Plenty’s average rate of decline appears to have stalled, as has Nelson’s and Southland’s, but not so lucky are Gisborne and Waikato, where the rate of decline has gathered pace in the last three months.
“Sellers, like buyers, are understandably worried about rising interest rates and will be hesitant about selling in the midst of a downturn.
“The Reserve Bank has warned that monetary conditions will need to tighten further to get inflation back within its target range, and flagged a cash rate peak of 5.5 per cent.”
Valocity head of valuations James Wilson Photo / Fiona Goodall
Wilson said to expect demand to drain from the housing market in the coming months, especially in areas hit hardest by recent extreme weather.
While the shortage of new listings would help prop up values in some areas, the glut of older stock was a concern with buyers likely to see further price declines in areas where there are more homes to choose from.
“Of the 1167 suburbs that recorded 10 or more settled sales in the last 12 months, 84 per cent were down year-on-year, compared to just one suburb a year ago.
Valocity senior researcher Wayne Shum said first-home buyers increased their share of purchases nationally month-on-month from 41.6 per cent in December to 43.3 per cent in January.
Investor purchases in January were up 1.1 per cent on last year at 20.8 per cent.
Shum said interest rates were the “dominant force” in the market and with the Reserve Bank “laser-focused” on tackling inflation, they would be for the months ahead.
“However, the recent lift in the cash rate seems to have been baked into the major retail bank plans.
“There were no corresponding mortgage rate increases at the time of the Official Cash Rate announcement and the fact that some of the main banks have longer-term rates lower than their shorter-term rates may be a sign that the end of the tightening cycle is near.”
