Papamoa property earned $395 a day for retired couple

Vendors Mal and Linda Lewis. Photo/George Novak

A three-bedroom Papamoa house has earned its owners $395 a day after they sold it for a $216,000 profit 18 months after buying it.

Mal and Linda Lewis bought the house off the plans 18 months ago for $399,000 and have just sold it for $615,000 as demand in the city continues to outstrip supply.

First National Papamoa real estate agent Jeremy Cunningham said the property had 4000 hits on Trade Me, 1675 video views, 4165 Facebook views and had multiple offers on its asking price with "more than five disappointed buyers".

The Papamoa market had jumped significantly and "come alive", he said. "We have had brick and tile houses previously, built in the 1990s, come up from around the $390,000 mark to the $600,000 mark in the last couple of years ... Papamoa is growing and has been a bit of a sleeper in Tauranga for a while."

The Lewises, who sold the immaculate, low maintenance Papamoa house they had lived in for nine months, said it was a "very good investment".

The retirees, formerly from Whangaparaoa, said initially they moved to the Bay for a quieter life "but it's too damn busy", Mr Lewis said.

The couple decided to leave Tauranga and build their seventh house in Te Aroha with views of the Waihou River.

Figures from the Real Estate Institute of New Zealand show Tauranga house sales, which included sales in Mount Maunganui and Papamoa, dropped last month to 234 compared to 341 in July 2015 but agents said that trend was not new.

Data from the institute revealed the median house price over the same timeframes in Tauranga had climbed to $544,000 compared to $437,000 in July 2015, while Mount Maunganui and Papamoa rose to $647,500 from $530,000.

REINZ regional director Philip Searle said the shortage of listings remained acute in some parts of the region with the limited availability of properties restricting choice and generating competition between buyers.

Tauranga Harcourts managing director Simon Martin said every year listings dropped over winter and came back up in spring. However, an increase in demand had also affected the volumes of sales.

But "we have just had the biggest listing week we have had all year and have noticed a substantial increase in the stock levels which are going to the marketplace so that should in theory increase the volumes of sales available".

The rise in median house prices indicated what people were paying for property and low interest rates meant they could spend more, Mr Martin said.

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the region was in a strong position economically and had experienced job and business growth.

"It's a great place to live and as long as those factors are in place we will continue to see Tauranga as a sought after area and we will have these impacts on the housing market for some time yet."

First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said the market was still waiting to see any potential impacts of the new 40 per cent LVRs but new KiwiSaver tools for first home buyers could counter that.