Four hundred and eighteen properties sold in Pyes Pa with an average sale price of $460,000.
In the most affordable suburb, Parkvale, 96.47 per cent of properties were under $450,000 - but only 99 properties were sold. Papamoa Beach was the biggest selling suburb, with 1061 properties sold, but also the fifth least affordable, following Bethlehem and Matua.
Colleen Milne, chief executive of the Real Estate Institute, said the Tauranga property market at present reflected a shortage of housing stock within a hot market, which applied upward pressure to the median price.
"Tauranga, like other areas of the country, is seeing rapid increases in the median house price where last month's median sale price was $511,500, an increase of 3.6 per cent on February and 18 per cent on March 2015."
The KiwiSaver Home Start Grant gives first-home buyers a grant towards a new build or an existing home valued at $450,000 or less in Tauranga and the Western Bay of Plenty, with a bigger grant for new builds.
But with booming house and land prices in the region, coming in under the threshold is becoming harder.
Building and Housing Minister Nick Smith said the Government had no plans to change the $450,000 house price threshold currently in the Bay of Plenty.
"While house prices have increased, they are still more than $100,000 less expensive than in Auckland, where the price cap is $550,000.
"The scheme deliberately puts pressure on the housing sector to produce more homes in the $450,000 bracket and this incentive would be reduced if the cap was increased."
The market for section sales has increased dramatically over the past 12 months.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said in the traditional Pyes Pa area, there were many large homes on large sections and on the Veda Glen side of the suburb, properties would be out of the $450,000 price range. "It is not surprising that there are very few for $450,000 and below."
Like many suburbs, homes in The Lakes were also increasing in price during resale.
"The market for section sales has increased dramatically over the past 12 months," Mr Stanway said. "That, combined with the increase in building costs, has probably pushed some, not all, above the $450,000 price range."
Mr Stanway said to get new home builds under the $450,000 threshold you would be looking at two-bedroom houses.
Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said the $450,000-and-under market was hotly contested as it was the new entry point to the market. It attracted investors and first home buyers.
Mr Purcell said there was a big price jump for people who already owned a home in this price range to upgrade. Gavin Muldoon from Hugh Green Group, the company behind Welcome Bay subdivision Ballintoy Park, said it was possible to get a house built for $450,000 last year but this year the cheapest sections in the subdivision had reached $220,000.
"You've still got to chuck a house on that. The lack of supply is contributing to high land prices. There was an oversupply in Tauranga for a number of years and nobody building extra subdivisions. Now things are selling it's come home to roost."
Venture Developments director Mark Fraser-Jones said it would be good if the Home Start grant was increased, but he believed this would push house prices even higher.
Aaron Peddle (pictured) used his KiwiSaver savings and took advantage of the HomeStart grant to pad out his deposit and build his first house in Paengaroa.
Mr Peddle decided to move to the village with his young family after renting in Welcome Bay.
"The house we were living in ... was really mouldy and boggy. Our Paengaroa house is a new build on a 900sq m section. We got the land and the house for $325,000."
Mr Peddle moved into the house in December and has found the 15-minute commute to work easy, especially with the Tauranga Eastern Link on his doorstep.
"We were very lucky to be able to build. It's just impossible to get much in town."
The rental he was living in was bought by a woman from Auckland.
"We're a young family with two kids on one income - that's what we're competing with."
Tauranga prices were "ridiculous" and being able to access the grant and his KiwiSaver savings had been a big help.
2015 Kiwisaver Home Start Grants
- • 689 applications approved
- • 577 grants paid out
