High demand pushes up Rotorua house prices

The Professionals McDowell Real Estate co-owner Steve Lovegrove (right). Photo/File

The Rotorua housing market is experiencing a shortage of stock which is influencing prices, according to local agents.

Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said while there was still a good demand for properties in Rotorua, the homes were not readily available.

"Prices have gone up, the market is definitely stronger on a lower turnover."

The QV House Price Index for July released today shows the average current value in Rotorua is now $399,024 - up 17.8 per cent over the past 12 months and slightly increased by 0.7 per cent in the past three months.

Nationally average values rose 6.4 per cent over the past year which is the slowest annual rate since February 2015. Values increased 1.6 per cent over the past three months, bringing the nationwide average value to $641,280.

Mr Anderson said investors were operating within the city as Rotorua was still seen as a good opportunity.

"I know the June figures took a hell of a hit but, on average, prices are going up. We're not seeing now, what we saw then."

Professionals McDowell Real Estate co-owner Steve Lovegrove also said there was a shortage of properties for buyers.

"Homes are coming on to the market at a normal level but the demand means they don't stay on the market for long," Mr Lovegrove said.

"We're still seeing a high demand for good, clean, well-presented family homes. When one is listed it goes straight back out the door."

He said unlike the Auckland market, low stock levels were not building up and time on the market was shorter.

"While homes in the mid-range, $400,000 - $500,000 are still in exceptionally high demand, there is also still good activity in the $1 million price bracket. Attendance at open homes is also very strong."

Mr Lovegrove said Rotorua remained an attractive place for people relocating from big cities.

"So subsequently there will be an incremental increase in prices due to the demand. The increase is at a sensible rate and not at the rapid rate we saw last year.

"We feel confident heading into the spring market."

The average value in Whakatane went up by 13.3 per cent in the last 12 months, rising to $403,798. In Tauranga and Western Bay of Plenty, values rose by 12.3 per cent and 14.4 per cent, making the average properties $691,350 and $617,754 respectively.