Tauranga housing: More properties listed in city but agents warn tighter lending rules will hit

Agents warn new lending rules may continue to prove challenging for first and second-home buyers. Photo / Getty Images

Property listings are up in Tauranga and so is the median house price but agents warn new lending rules are impacting first-home and other buyers.

Real Estate Institute (REINZ) December data released yesterday showed Tauranga's median house price rose 1 per cent to $1,010,000 from $1m in November 2021.

In the year, it rose a total of 22.4 per cent or $185,000.

The median house price in Western Bay of Plenty dropped 8.2 per cent in December to $904,500 - but was still up $170,500 on the previous year.

REINZ regional director Neville Falconer. Photo / Supplied

REINZ regional director Neville Falconer said the wider Bay of Plenty's median house price climbed 27.8 per cent to a new record of $920,000 - from $720,000 in December 2020.

Falconer said it felt like the market in December slowed down earlier than usual.

"Attendance at open homes dropped noticeably in mid-November rather than mid-December, which saw activity in the market ease - in some cases due to existing finance agreements being pulled altogether."

As a result, Falconer said properties were spending longer on the market, with the average days to sell up by three to 30 days compared to last December.

"However, this increase in days to sell is relatively minimal and indications are that the market remains strong notwithstanding the uplift in median days to sell.

"The number of new listings increased in the Bay of Plenty, and inventory levels are slowly replenishing after the Covid-19 lockdowns of 2021."

Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / NZME

Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson said a good level of new listings came to the market at the end of November and into December.

"That gave buyers options for the December market. The balance went back to the buyers."

While Anderson said activity from Aucklanders freed from lockdowns was not as strong as expected, the first two weeks of January had "really picked up".

"Over Christmas, a lot of people were in the Bay of Plenty but typically they were on holiday.

"The level of interest has grown significantly in the last two weeks. Open homes have been busy."

The number of properties sold last month was down compared to December 2020 - 278 from 341 - but Anderson said prices were well up.

Anderson said the top end of the market remained strong but there will be challenges borrowing from the banks for first and second-home buyers.

The Credit Contracts and Consumer Finance Act, introduced on December 1, requires more detailed financial information from borrowers.

"That's causing some level of concern in that market.

"But overall, we are going to come out into a really strong market in the early months of this year."

First National Real Estate Tauranga general manager Cameron Hooper. Photo / NZME

First National Real Estate Tauranga general manager Cameron Hooper said December was "good" and more stock was coming into the market.

Vendor expectations were proving tricky to navigate but more stock will allow more buyers to come to the market, he said.

"Listings will continue to grow. Hopefully, we will see 1000 listings in the next three-to-four months. That will be an awesome number to see."

Hooper said a brick and tile home for under $800,000 was a rare find in Tauranga's market.

But first-home buyers would potentially find it easier to enter the market as people moved from the older stock into newer homes.

"They might find access to older properties with a little less competition."

Tighter lending rules may also remove the "bullish" behaviour from buyers.

"This now asks a few needed questions of them of [mortgage] serviceability. It will end up being a positive."

Tremains managing director Anton Jones. Photo / NZME

Tremains managing director Anton Jones said there had been a "significant" increase in listings meaning a lot more options for buyers.

"Spring came late."

Jones said the changes to lending criteria will certainly be more challenging for buyers.

"People are going to have to be on to it with their banks and finances. If they want to buy a house in the next few months people may have to clean up their spending."

Meanwhile, Rotorua's house price has reached a record high of $700,000.

First National principal and Rotorua REINZ spokeswoman Ann Crossley said the city's median house price was skewed by 10 residential million-dollar listings.

Among them was a lakeside property that sold for $1.8m, she said.

In contrast, Crossley said there were only seven sales under $500,000.

Crossley said December was typically busy for about two weeks, but a combination of the latest Covid-19 lockdown and finance uncertainties meant it had been quiet.

"The criteria is hitting everyone. A lot of people who had pre-applications had them pulled."