'Cheaper' homes hard to sell

One real estate expert says it's still a buyers' market in Rotorua, despite rising asking prices.

Property sellers in Rotorua are expecting more money for their homes but some speculators have been caught with hard-to-sell low value properties, says one real estate expert.

Trade Me figures showed a 6.3 per cent increase in median asking prices for properties in 2014 compared with the previous year in the Bay of Plenty.

Despite the increase, Real Estate Institute spokesman Ian McDowell said vendors trying to sell "cheaper" houses in Rotorua were struggling to reach asking prices.

"The lower priced properties are selling for way below asking price and there are a lot of houses on the market in that price range.

"There are lots of houses for sale, around 900, particularly the lower priced homes.

"People have bought them as investments and now want to quit them but are struggling to get their money back.

"When you get up into the $300,000s, there is more demand so sellers are doing better. That aside, Rotorua is still very much a buyers' market."

Mr McDowell said interest from out-of-town buyers was growing and helping to push the market back in favour of sellers.

"Finally we have out-of-town people coming to Rotorua and seeing the value of our properties which is putting pressure on the mid to higher price range," he said.

Nationwide, the median asking price for properties fell in December 2014 by 0.9 per cent from the previous month. But despite the month-on-month drop, sellers were still expecting $57,000 more for their properties than in December 2013.

Trade Me data showed the median asking price for a property had been $504,300 for the three months to December.

Head of Trade Me Property Nigel Jeffries said the pause after a recent surge in asking prices was expected.

"December is traditionally one of the quietest months of the year so this slowdown is more about there being fewer new listings, rather than an underlying weakness in price expectation by sellers."

Mr Jeffries said the median asking price for a property in New Zealand had consistently increased over the past five years.

"In December, we saw average asking prices across New Zealand increase by almost 13 per cent year-on-year."

Hawke's Bay recorded the biggest increase in median asking price of 20.3 per cent, compared to 2013. Southland was next with a 16.4 per cent increase.