CoreLogic says resale gains were "stronger than ever" across the country. Photo / Getty Images
CoreLogic says resale gains were "stronger than ever" across the country. Photo / Getty Images
Home sellers are making big profits in Tauranga's heated property market, new figures show.
CoreLogic's latest Pain and Gain report shows the average house sold in Tauranga in the first quarter of the year made a profit of nearly $403,000.
The report also shows 98.5 per cent of Tauranga properties sold between January 1 and March 31 made a profit.
Residents made a median gain of $402,500 per property and a gross gain of $115,780,564. Tauranga properties that resold for a gross gain in the January quarter were held for a median 6.5 years.
Managing director of Tremains Bay of Plenty, Anton Jones. Photo / File
Managing director of Tremains Bay of Plenty, Anton Jones, said property values had risen significantly in the past six and a half years.
"Most properties have almost doubled in value. We've seen a lot of that in the last two or three years let alone six and a half.
"That's just pure demand for Tauranga and the desire for people to come and live here."
First National Real Estate Tauranga general manager Cameron Hooper. Photo / File
First National Real Estate Tauranga general manager Cameron Hooper said there was a shortage of stock so agents were revisiting people they had sold houses to a few years ago that had made good gains to ask if they wanted to sell.
"Some have done nothing to their properties. It's purely looking for business and houses to sell."
Simon Anderson, managing director of the Realty Group, which operates Eves and Bayleys, said a lot of people were sitting back and waiting to sell their properties.
In the meantime, they were renovating, which is where the capital gain came in, he said.
"People sell for all sorts of reasons but typically they don't sell for capital gain. That is just the result. A lot of people are thinking they will sell at some stage but they have nowhere to go.
"Listings are low in the market currently."
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / File
Harcourts Tauranga managing director Simon Martin said the amount of resale profit being made "just reflects what a good investment property is".
"Over time it generally goes up."
CoreLogic's chief property economist, Kelvin Davidson, said Tauranga and Rotorua markets had seen strong price rises, which meant the "gains" were also high.
"However, as with national trends, I'd anticipate some softer trends as we get into the second half of the year."
Nationally, profit-making property resales between January and March 2021 increased to 98.9 per cent - the highest reading in the 25-year history of CoreLogic's data series.
The median resale gain was $315,000 mostly accumulated over longer holding periods up from $291,000 in Q4 2020. At the previous peak in mid-2007, the median resale gain was just $129,500.
Davidson said the figures were "stronger than ever" with almost everybody who resold in the first quarter of the year selling above their purchase price regardless of location, buyer or property type.
"Capital gains intensified in the first three months of 2021 ..." he said.
"However, for most owner-occupiers, unless they're downsizing or moving to a cheaper location, those gains are simply recycled back into the next purchase – and in fact, would often be accompanied by more debt too.
"It's different for investors though, with some potentially choosing to take their gains."
Tauranga's top five biggest gains
311 Oceanbeach Rd Sale date: March 17, 2021 Sale price: $2,650,000 Previous price: $505,000 Gain: $2,145,000 Years held: 22.9
