Rotorua house values continue to climb but market cooling

House values are up in Rotorua but that is expected to ease, experts say. Photo / File

House values continue to climb in the city but experts say the strong growth is expected to ease.

QV House Price Index figures for November released this week show the average residential value of homes in Rotorua had climbed 9.9 per cent to $409,832 compared to a year ago.

Values were up 39.6 per cent since the 2007 market peak and 0.6 per cent from October.

QV senior property consultant Michael Power said Rotorua had experienced a buoyant market throughout 2016 and into 2017 but the growth rate was now easing in line with national trends.

"The market has been influenced by generally favourable economic factors such as increasing population and low interest rates as well as an increased demand locally.

''Although values have increased over the past two years, Rotorua is still considered reasonably affordable by many compared to the larger cities.''

Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said Rotorua had seen an incredibly large increase in property values over the last couple of years.

''People have seen Rotorua as being good value and that percentage growth in the last 12 months will be well ahead of other areas in New Zealand. So Rotorua is still in demand and we are still seeing a shortage of listings in Rotorua which is driving activity.

''But like any market around the country we are seeing a cooling and it's heading back to a more normal market where the number of sales will be consistent with previous years and the growth will steady.''

Anderson said there was still demand and a shortage of good quality, executive homes over $750,000 but most of the activity remained under $500,000.

On a positive note more first-home buyers were looking to buy in Rotorua, he said, while the investor market had pulled back a bit.

''People are happy to travel from the likes of Tauranga where the market is a bit stronger and there are younger families that want to get into the property market in Rotorua.''

LJ Hooker Rotorua principal Malcolm Forsyth agreed and said at the moment the market ''is showing some very solid consistency''.

''Since the election was finalised we have seen some good activity, prices have stabilised around that mid-$300,000 to $360,000 mark.''

For that price people could expect a tidy three to four-bedroom home in solid areas including parts of Glenholme, he said.

It had buyers in November that had bought across all price ranges from $200,000 to $900,000 although properties at the lowest end were increasingly difficult to find.

Overseas buyers, those from out of town and people buying and selling within the city were present in the marketplace.

''There has just been a lot more happening over the board with more listings starting to come on. So the whole market is sort of re-stimulating itself.''

Average residential November values
* Rotorua $409,832
* Taupo $458,000
* Hamilton $544,000
* Tauranga $687,000
- Source QV