Tauranga property sales drop, median price up

House prices have risen, but sales volums have dropped. Photo/File

Tauranga property sales dropped 21 per cent in the past 12 months, new figures show.

In May 2017, 278 properties sold in Tauranga compared to 352 in May last year, a decrease of 21 per cent. In the Western Bay of Plenty, there was a drop of 26 per cent, with 59 sales compared to 80 in May last year.

Across the Bay of Plenty region, sales dropped 24 per cent. Kawerau was the only area in the region to record an increase, 10 per cent, the Real Estate Institute of New Zealand figures showed.

The median sale price in Tauranga rose just under 5 per cent, hitting $645,000. Nationally, the median price was slightly more than $540,000.

Institute regional director Philip Searle said investor interest remained subdued across the region, although out-of-town and first-home buyers were still active.

"Well-priced properties are selling well, indicating that vendors may need to lower price expectations moving into winter.

"The lift in inventory levels compared to May last year is also providing more choice for buyers."

First National Realty Mount, Tauranga and Omokoroa owner Anton Jones said low sales were not unusual at this time of year when fewer houses were for sale.

"Coming into winter it always reduces it in terms of volumes. It's actually not a bad time to put your house on the market."

Mr Jones said prices had "plateaued".

"Buyers are being a bit more selective . . . It's an interesting time at the moment; it's not a buyers' or sellers' market."

Simon Anderson, chief executive of Realty Group which operates Eves and Bayleys, said his agency handled more sales in May than in April.

Mr Anderson said Tauranga's median prices represented a return to normal after previous large increases.

"What we are experiencing now is a slowdown in the level of the increases, really back to what we would consider a normal market."

Tauranga Harcourts managing director Simon Martin said the market was not quite balanced during the second half of 2015 and the first half of 2016 because there was huge demand for houses but low supply.

Mr Martin said the market was now more stable with an increase in supply but the banks were being tougher with lending criteria for first home buyers and investors, which resulted in fewer sales of lower-priced homes.

Comparing last year's sales volumes to this year, there was a bit of cooling off in the market, but looking at last month's sales, there was an increase in activity, he said.

Greg Purcell, franchise owner of Ray White Realty Focus in Mount and Papamoa, said the market was "cooling off".

"It's not as though it's fallen off the side of the cliff, but the numbers have dropped away."