REINZ: Million dollar sales becoming more common in Rotorua

Million-dollar sales are becoming more common in Rotorua, agents say, as the city reaches yet another median house price record.

Despite its new record median of $600,000, Rotorua is still seen as an affordable buying option with the latest alert level shifts making the lakeside city attractive to Aucklanders.

The Real Estate Institute of New Zealand's latest figures showed Rotorua ($600,000), Kawerau ($367,000), Tauranga ($854,000) and Western Bay of Plenty ($793,500) all reached record median highs in January.

First National principal and Rotorua REINZ spokeswoman Ann Crossley. Photo / File

First National principal and Rotorua REINZ spokeswoman Ann Crossley said the property market had a "normal" January.

But there were plenty of million-dollar sales, she said.

"There was something like eight over the top of $1 million - three in the lakes area, one rural and four residential."

But she said there was still a shortage of stock.

"It is dire. People won't list because there's nowhere to go."

Moving into alert level 2 had not had too much effect on the property market, she said.

"But it did put everyone on notice. It's a fragile environment."

However, if Auckland returned to level 3 she said there may be a rush of Aucklanders to the Bay.

Professionals McDowell Real Estate co-owner Steve Lovegrove said despite Rotorua reaching an "astounding" new record the city still seemed a relatively more accessible buying option.

"What scares us is where it's going to end. Million-dollar properties are becoming more common in Rotorua itself.

"Both Tauranga and Rotorua are going to travel in unison in terms of elevation of prices. We're starting to see that spread to the Eastern Bay in places like Kawerau."

Professionals McDowell Real Estate co-owner Steve Lovegrove. Photo / File

Lovegrove said the shift to higher alert levels meant more Aucklanders were becoming attracted to the region and Rotorua.

"We're excited because every time it happens it chases the Aucklanders and motivates those people who are thinking of a lifestyle change outside of Auckland to Rotorua.

"They will literally be packing their bags right now."

Harcourts Rotorua sales manager Colville Barbour said the January median house price for Rotorua of $600,000 was an "incredible result" when compared to $490,000 a year ago.

"It is a reflection of the fast-moving market we are currently experiencing, which in many respects is unprecedented.

Harcourts Rotorua sales manager Colville Barbour. Photo / Supplied

"There are now numerous sales occurring over a $1m a figure that until recently was almost unheard of."

Barbour said the current concern was underselling a property in this market and was why auctions were a "very viable option".

"Our recent auctions have all sold and have all achieved prices in excess of vendor expectation."

Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson, said he expected to see the number of sales pick up in Rotorua.

"The desire for property by the lakes is still very strong."

OneRoof editor Owen Vaughan said the REINZ data supported their own recent market figures, which showed New Zealand house prices outstripping pre-Covid prices by $130,000.

Vaughan said the big question was if the latest lockdown will have an impact on prices.

"The last time New Zealand's housing market was beset by alert level 2 and 3 restrictions the housing market took off, with agencies recording big sales in their online auctions.

OneRoof editor Owen Vaughan. Photo / File

"Stock issues and increased buyer demand remain factors in the market so it's unlikely prices will change their trajectory - even if the lockdown is extended for a period."

REINZ regional director Neville Falconer said ongoing demand and competition between first-time buyers, owner-occupiers and investors continued to drive prices higher and push sales through quicker.

Falconer said the number of days to sell was down 11 days year-on-year to the lowest level for a January month on record.

"The REINZ House Price Index for Bay of Plenty increased 22.1 per cent in January 2021 from the same time last year to a record high level of 3595, further displaying the underlying strength of property values in the region."

REINZ regional director Neville Falconer. Photo / Supplied

Bindi Norwell, chief executive at REINZ said usually, in January the residential property market slowed and prices eased off as people head to the beach for their summer holidays.

However, she said the first month of 2021 was anything but normal, as house prices across the country continued to rise with January seeing four regions reach new record median prices.

"Additionally, the fear of future price rises and the fear of missing out lingers deep in buyers' minds and is impacting people's buying behaviour as January saw a continuation of properties selling at a rapid pace.

"Last month, residential properties sold at their fastest pace for a January month in 17 years, carrying on the pattern we've seen over the past few months and therefore continuing to impact pricing."