Tauranga housing market stabilises

Tauranga's housing market has stabilised but houses priced $1 million or more are selling. Photo/file

The Tauranga housing market has stabilised, but there is increasing demand for $1 million plus homes, real estate agents say.

Data from REINZ shows sale volumes have dropped but prices have climbed.

The median price for a house in Tauranga last month was $632,000 compared with $585,000 in April last year - and $628,000 in March this year.

The total number of sales in the city last month also dropped to 239 compared with 338 in April last year and 325 in March this year.

Simon Anderson, the chief executive of Realty Group, which operates Eves and Bayleys, said the market slowing was normal.

''It's moving back to something that is more sustainable and something the market can handle. We have got to realise April was a very short month with Easter, school holidays and Anzac Day.''

But the company was seeing a lot of interest and successful sales at the top end with high value and lifestyle properties selling for $1 million plus, he said.

Meanwhile, a lot of first-home buyers and investors were looking at the $400,000 to $600,00 price range, Mr Anderson said.

There had been a reduction in sales and activity in the $600,000 up to $1m.

Tauranga Harcourts managing director Simon Martin said April sale volumes had been lower than March for 17 years.

However, it had experienced an increase in activity in the past two weeks, particularly in the higher price bracket.

''I think the LVR is still having an impact on the lower price bracket, investors are still not coming back in at the volume that they were and the first-home buyers are a bit standoffish.

''So that means that the sales that we are making are generally in the upward price bracket, up to and over one million. This week we sold a number of properties over one million.''

Mr Martin said all the economic indicators were positive.

Greg Purcell, franchise owner of Ray White Realty Focus in Mount and Papamoa said real estate was supply and demand.

''I think it is chugging along quite nicely and not lopsided any more and screamingly in favour of the seller. I urge people to remember they have made a lot of equity gain in the last two years.

''I'm saying be realistic, it's still good news compared to 2008 and 2009 so put away your hanky.''

First National, Mount, Tauranga and Omokoroa owner Anton Jones said there were still a few people who were keen to buy quickly.

''Those that are priced realistically certainly sell quicker than those that the vendors are holding on to for those high blue-skies values. They sit on the market longer and the vendors are having to be more realistic with their pricing expectations.''

Priority One projects manager Annie Hill said the real estate market and the economy were tightly linked.

''The property market has been so strong over the last couple of years because we have had the highest job growth in the country, which means that more people want to come here to live and work, which is very good for the city.''

''In saying that, we have plenty of land zoned now and in the future on which to build houses and we are adding to our housing stock at a rate of around 140 new residential builds per month across the sub-region.''