House values increase by 7.1pc in Rotorua, buying 'definitely getting tougher'

LJ Hooker principal Malcolm Forsyth. Photo/File

As home buyers look for cheaper properties outside of the main centres, house values in Rotorua are rising - to the detriment of those with a tight budget.

The average value for a Rotorua home now sits at $419, 556, according to figures from the latest QV House Price Index.

That compares with $417,653 in February and $391,910 in March 2017.

Values in Rotorua have increased by 7.1 per cent in the year to March, just below the national increase of 7.3 per cent.

When the Rotorua Daily Post asked LJ Hooker principal Malcolm Forsyth if $419,556 was out of reach for most of the city's buyers, he said it was "definitely getting tougher".

"Buyers are having to take on more debt to secure homes, but it can be done."

Forsyth said Rotorua house values had to rise.

"We were so far behind. Our prices three or four years ago could not be sustained. We needed to go up or others needed to go down, so I am not surprised by the increases in the last few years."

He said he was currently looking to buy his own home in Rotorua.

"It has been an eye-opener being on the other side of the fence. There really is not a lot of selection.

"A lot of people focus on taxes at the end of the financial year in March, which can lead to fewer property sales during that month."

Professionals McDowell Real Estate co-owner Steve Lovegrove was pleased values were a lot more consistent in Rotorua in the last year than in the likes of Auckland.

"It is not boom or bust here. Nobody likes boom or bust changes because they cannot last. Consistency is much more manageable for everybody.

"If you sell during a rapid rise in values, it is hard to play catch up when you go to buy your next home in the same area."

He said there was no shortage of buyers in Rotorua.

"There are still not enough homes for people to live in. Demand is exceeding supply."

Nationally, the highest quarterly growth was in Opotiki where values rose 16.1 per cent in the first quarter of 2018.

Harcourts is the only real estate company with an office in the town.

Opotiki principal/sales consultant Wendy Moore said she was surprised to see such a high percentage increase in QV's figures.

"We are a small market with around 10 to 12 sales a month. We are on an upwards trend but one big rural sale in such a small sample size can skew the statistics."

Moore said she did not expect the average Opotiki value to climb rapidly again in the next quarter.

"For a coastal town we are relatively cheap and values are increasing steadily, but in my experience, we have not seen a sudden spike."

The latest from QV:

- The nationwide average house value is now $677,618
- When adjusted for inflation the national annual value increase drops from 7.3 per cent to 5.6 per cent for the year to March
- The average value for houses in Auckland is now $1,055,992