'Auckland effect' pushes up Bay of Plenty asking prices

Auckland's median house price slipped 3 percent in October from September, and the volume of sales dropped 19 percent. Photo / NZ Herald

The "Auckland effect" has driven up Bay of Plenty average property asking prices by $4000/month in the last year.

Nigel Jeffries, head of Trade Me Property, revealed the figures this morning on the effect which he explained.

"It's Aucklanders either looking for investments in Tauranga or looking for work and buying permanent homes there," he said, explaining that the data mainly applied to Tauranga.

"The phenomenon known as the 'Auckland effect' has infiltrated the Bay of Plenty property for sale market and it has become the second most expensive region to buy a house, according to October's Trade Me Property Price Index," he said in a written statement.

The Auckland effect had seen average asking prices climb by $4000 per month over the past year in the Bay of Plenty, he said.

"Prices have risen 25 per cent over the past five years, and the bulk of that has been since October 2012. Last month alone we saw selling price expectations for a typical property up by $11,400 since last month, breaking records and landing at a new high of $483,000.

"The Bay of Plenty is the second most expensive region in New Zealand to buy a house, behind Auckland but ahead of Wellington, Canterbury and Nelson/Tasman," Jeffries said.
But the Auckland market was showing clear signs of slowing, despite prices edging toward the $800,000 mark. he said.

"Average asking prices ticked up just over 2 per cent in the past month to $792,000 for a typical Auckland property. It now looks like the peak for year-on-year growth was July's 20 per cent leap. Over the past four months we've watched that slip back to 18 per cent. It's worth noting this adds up to a $121,000 increase in Auckland asking prices since July so it's still far from sluggish," he said.