Tauranga's "sexiest suburb" has lost its hot streak amid a regionwide property slowdown. Photo / Getty Images
Tauranga's "sexiest suburb" has lost its hot streak amid a regionwide property slowdown, a new report shows.
A new suburb-by-suburb breakdown shows Tauranga was moving with the tide of a regionwide property slowdown as four suburbs, including sought-after Mount Maunganui, dropped in value.
Bay of Plenty figures from the OneRoof-ValocityHouse Value Index, due to be released in full tomorrow, show Tauranga's average property value has started to stall, growing just 0.6 per cent to $1.243 million.
The biggest drop was recorded in Mount Maunganui, down 2.5 per cent - or $43,000 - to $1,672,000.
Bellevue and Pyes Pā also dropped in value, with Bellevue down 0.3 per cent - or $3000 - to $933,000 and Pyes Pā down 0.10 per cent - or $1000 - to $1,226,000.
Pāpāmoa and Tauranga South's property values climbed the most, with Pāpāmoa up 5.7 per cent - or $60,000 - to $1,114,000 and Tauranga South up 5.1 per cent - or $52,000 - to $1,067,000.
The city now has just seven suburbs with an average property value under $1m.
OneRoof editor Owen Vaughan said Tauranga was feeling the downward pressure of a slowdown.
Short said the Mount was not a discretionary market, but it had an air of discretionary activity to it.
"Holiday homes are the properties that tend to get sold first. People are going to be cashing up their holiday homes and consolidating their finances when they think the economy slows, which it is."
"I do think the affordability point of that market is higher than any other market. People become more restrained in their bullish behaviour when the market isn't booming."
Heath Young, managing director of the Realty Group Ltd, which operates Eves and Bayleys, said the quarterly growth almost showed a definite stabilising in pricing.
That was being influenced by the new lending rules, interest rate hikes, Covid-19 and inflationary pressures, he said.
"Pāpāmoa is still showing strong pricing given it is one of the most searched and desired areas to reside in for those new to the region.
"The Mount is showing a slight decline in average pricing as it comes off a higher base and realistically higher historical growth rates."
Young said the suburbs most affected by a property slowdown would depend on the factors causing demand and supply to rise and fall.
"If you are in a suburb that lends itself to either investors or first-home buyers, where bank funding and interest rates will impact on potential buyers, then this could reduce demand for these suburbs."
Tremains Bay of Plenty managing director Anton Jones said property values had definitely dropped, but the high-value homes were still selling well.
But he expected the market to fluctuate over the next few months.
The OneRoof-Valocity House Value Index showed house price growth in the Bay of Plenty slowed to 2.2 per cent over the quarter.
Ōpōtiki was bearing the brunt of the market slowdown in the region, with the average property value falling 2.2 per cent - or $14,000 - to $623,000.
Rotorua, however, was bucking the trend with its property value climbing $33,000 in the past three months.
Nationwide, 17 of the country's 71 territorial authorities registered zero or negative growth over the quarter.
Lower Hutt suffered the steepest drop at 2.9 per cent, Auckland was next at 2 per cent, followed by Hamilton at 0.5 per cent, Tauranga at 0.6 per cent and Dunedin at 0 per cent.
Wayne Shum, head of research at Valocity, said the steady rise in mortgage rates had dampened market activity and put downwards pressure on the volume of mortgage registrations.
However, he said the Credit Contracts and Consumer Finance Act probably had the biggest effect on buyer appetite.
"For many, getting a mortgage has proved too hard, and delayed or torpedoed purchase plans.
"The U-turn on some of the CCCFA's more-stringent measures will come into effect in June, so there may be a brake on further falls."