Agents say the property market has dramatically shifted in the buyers' favour. Photo / Getty Images
House prices in Rotorua have hit another record high, bucking the trend seen in other cities such as Tauranga.
It comes as agents report a dramatic shift to a buyer's market.
The latest Real Estate Institute of New Zealand monthly property report shows Rotorua's median house price jumped 6.9 per cent to a record $770,000 in March, from $720,000 in February.
It was one of only two cities in the region to increase, including Western Bay of Plenty, which climbed 4.8 per cent to a record $1,100,000 from $1,050,000.
Other cities, including Tauranga, Whakatāne, and Kawerau, had median price drops between 4.3 per cent and 7.7 per cent.
REINZ regional director Neville Falconer said stock levels in the Bay rose 73.8 per cent year on year and listings were up 11.5 per cent.
Falconer said like many regions nationwide, the supply of property in the Bay now outweighed demand.
"With market headwinds such as changes to the CCCFA [Credit Contract and Consumer Finance Act], rising interest rates, the reintroduction of LVRs and Covid-19 adversely impacting buyer demand, open homes have seen fewer attendees, and auction rooms have been emptier than they were this time last year.
"Sales activity also saw a decline — down 25.7 per cent year-on-year."
Property Brokers regional manager for the Bay of Plenty, Simon Short, said increasing stock levels meant FOMO - fear of missing out - factor was now not as prevalent.
"The balance of power has moved across the ledger. Buyers have more opportunity to be able to negotiate because the supply is extensive and demand diminishing."
But he said first-home buyers were facing inflationary pressures, which were impacting interest rates and making it harder to secure finance.
Heath Young, chief executive of the Realty Group Ltd, which operates Eves and Bayleys, said the data showed there had been a "logical shift" in market conditions.
The market quickly switched from more demand than supply to now supply outstripping demand within a short period, which appears to have affected most price ranges, he said.
Young said depending on the first-home buyer's situation, this could well be a good time to buy.
"There are some early signs that some lenders are slightly relaxing debt-to-income ratio caps caused by the unintended consequences of the CCCFA.
"The key for them is to ensure that they surround themselves with the right advisers in terms of their finance broker and real estate agent, to understand what's happening, what their options are and be in the best position to decide, when they find the property, they want.
"Just because the heat may have come out of the market, in terms of the number of willing and able buyers, does not mean they won't face competition."
Rotorua Professionals McDowell Real Estate principal Steve Lovegrove said the market had "dramatically turned".
"We still have a housing shortage but the appetite from buyers has been subdued because of the lending rules, inflation and interest rates."
Lovegrove warned, "vendors are now competing with other vendors".
Just weeks ago buyers did not have much to choose from, but now they did.
"Because of that, how a vendor markets, presents and, more importantly, prices their property is going to be critical to getting sold...
"Now, if a vendor wants to move on to sell they might have to look more willingly at what the buyer is offering and remembering they don't have the same access to money they did before.
"Vendors are now going to have to adjust their expectations."
Lovegrove said there were 50 per cent more listings than normal, but properties were selling at half the rate.
First-home buyers were "extremely nervous" at the rising cost of servicing a mortgage.
"That is crushing a lot of enthusiasm."
Ray White Rotorua business owner and principal Jacqueline O'Sullivan said the drop in open-home attendees and active bidders at auctions was "quite noticeable".
O'Sullivan said listing numbers were climbing, properties were taking longer to sell, and buyers had more choices and weren't willing to put "crazy money" on paper.
However, areas sought after for location were still demanding premium prices and getting them.
O'Sullivan said first-home buyers and investors would come back into the fold now.
"In the last couple of years, your offers had to be as clean as possible to compete and secure a property.
"We are seeing a lot more of the 'subject to house sale' contracts coming through with timeframes up to eight weeks for conditions to be satisfied, whereas last year in that position you would probably have been on the back foot in a multi-offer situation and not able to bid at an auction."
"Wow. Did we just buy a house?"
That was Sarah Rogers-Robertson's reaction after securing the keys to her first home.
Rogers-Robertson, 34, bought her first home in August year after searching for about three months.
The mother of two paid $592,000 for her four-bedroom home in Reeve Rd in Ōwhata.
"We are so lucky we bought last year. There is no way now we would be able to buy in today's market."
Rogers-Robertson was renting with her husband and two children for about nine years in Rotorua before they decided to buy their first home.
With a bit of help from KiwiSaver, family inheritance and some savings, they were pre-approved.
The pair visited numerous open homes each weekend in search of a home they could call their own.
"There were so many weekends going to open homes. I had a notebook and I would write down the different addresses and open-home times.
"It was overwhelming. Sometimes there were about 40-odd people in one house."
They lost out at a multi-offer on one property, and again at auction, before finally being able to negotiate a price on the property they are in now.
"It was nerve-racking. But once we got the keys it was like: 'Wow'."
Rogers-Robertson said the day they got the keys, she and her husband were at the property within an hour and had started painting the walls.
"Four years ago we didn't think this was possible ... It is still sinking in.
"It's taken me a while to think I can screw a hole in the wall because it's my wall."
Her advice to first-home buyers was not to give up.
"If you really want something, there is a way. Have a list, but keep it simple, be prepared to compromise.
"Save as much as possible and really get to know your income versus expenses. If you get a pay rise, save it. If a bill becomes a little cheaper, save the difference. Every little bit counts and proves to lenders you can save."
Rotorua district:
$720,000 to $770,000
Western Bay of Plenty:
$1,050,000 to $1,100,000
Tauranga City:
$1,100,000 to $1,045,000
Whakatane district
$820,000 to $785,000
Kawerau district
$493,000 to $455,000
Bay of Plenty
$969,000 to $937,000
Source: Real Estate Institute of New Zealand
The jury's marathon deliberations ran for two weeks.