Tauranga house prices rise 4.5 per cent, while sales listings drop off

Tauranga's low numbers of listings are keeping housing prices strong, says REINZ regional director Phillip Searle.

Tauranga house prices have jumped 4.5 per cent in the past year and a short supply of listings may be behind some of the increase, real estate bosses say.

The latest data from the Real Estate Institute of New Zealand showed the median house price in Tauranga jumped from $607,500 in July 2017 to $635,000 last month.

The Western Bay's median house price was $565,000 last month, a 0.9 per cent decrease compared with $570,000 in July 2017.

Two hundred and thirty houses were sold in Tauranga in July, compared with 223 in July 2017. In the Western Bay, there were 46 sales last month, increasing from 41 in July last year.

REINZ regional director Philip Searle said the Bay of Plenty market was still seeing low housing stock levels and new listings were often attracting multiple offers.

"First-home buyers' interest has cooled, which could be an effect of the lower listing numbers. Investor numbers have now jumped to 60 per cent of the total buyer interest, and most are locals who know the area well."

Searle said the low listing numbers were keeping the prices strong.

"We are starting to see early signs of a spring influx of listings as these are picking
up now and hopefully the buyers will also come along."

Simon Anderson, chief executive of Realty Group, which operates Bayleys and Eves, said Tauranga was still seeing continued buyer interest, particularly from investors.

He said there had been a slight drop-off in first-home buyer interest. While banks were loosening the straps around lending, this was not yet translating into sales.

Anderson said there was still plenty of interest in the higher end of the market but there were not enough listings for demand.

He expected that would change going into spring.

Tauranga Harcourts managing director Nigel Martin said when there was a winter drop-off in listings potential buyers often waited until the right property came on the market, particularly those wanting to buy in the higher price range.

Martin said the Mount and Pāpāmoa market was relatively stable last month but in Tauranga, there was a drop in sales, possibly driven by the low number of listings.

Martin said he was quite confident the usual spring influx of new stock would start to hit the market in a few weeks, which could "fire up" more sales, particularly in the higher end of the market.

OneRoof editor Owen Vaughan said the data was in line with his assessment of Tauranga's housing market, and anecdotal evidence he gleaned from local estate agents.

Vaughan said the "halo effect" continued to place pressure on Tauranga's housing stock as Auckland and other parts of the country became even more expensive places to live.

Tauranga's thriving economy and great lifestyle were also attractive drawcards, he said.

July 2018 house prices and sales:

Tauranga City: Median house prices $635,000; Sales volume: 230.
Western Bay: Median house price $565,000: Sales volume: 46.

- Real Estate Institute of New Zealand