Rotorua's median house price creeps up as there are more sales over $500k

Rotorua's median house price has continued to rise with roughly a quarter of the city's December 2018 sales above the $500,000 mark.

The latest figures from the Real Estate Institute of New Zealand (REINZ) show the median price of property in Rotorua increased by 11.7 per cent from $385,000 in December 2017, to $430,000 in December 2018.

First National principal and Rotorua REINZ spokeswoman Ann Crossley said the 80 sales in December were roughly what was to be expected over the Christmas period.

"There's always a decrease because it's technically only three weeks for us."

Crossley said there had been an increase in the number of sales in the higher price brackets with 22 sales between $500,000 and $999,999 and a further two over the $1 million mark.

"With these big sales, if we can get the listings they sell.

"There are still a number of first-home buyers and some are not using Home Start Grants so they can go higher."

Crossley said she didn't expect the market to slow down in 2019.

"We've had population growth but not housing growth and that's going to continue.

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"I think it's going to be another positive year for people selling and it's still tight for people buying and renting."

Tremains Real Estate Rotorua branch manager Malcolm Forsyth said the lead-up to Christmas had brought a strong market and a high number of sales but in December there was an issue with new listings coming to the market and Christmas slowed the pace.

He expected good market activity in the first few months of the year.

Tremains Real Estate, Rotorua branch manager Malcolm Forsyth. Photo / File

"We're still seeing multi-offers, good activity and good numbers through open homes.

"Properties are not hanging around, there's no doubt about that."

Professionals McDowell Real Estate co-owner Steve Lovegrove said the price and sales count were related.

"When you have got more demand than supply it forces prices up and that's the essence of what's going on.

"We've got a big demand and increasing population. There's more competition for properties as landlords are releasing their investment properties."

Lovegrove said the market was "buoyant" and achievable for first-home buyers and he expected that to continue.

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

"We're seeing a strong line of listings coming in so I think we could be in for a really good, strong start to the year.

"There are no international upsets or domestic threats of change that would affect property, interest rates are stable and low ... there seems to be good confidence in the business world as well.

"That makes people think 'let's get on the real estate bus'."

Lovegrove said he had also seen a number of people renovating and reselling properties after a few years.

"I wouldn't say it's flipping, I just think people have enough confidence to upgrade. They've bought a first home and tidied it up and are confident there are buyers out there.

"That also contributes to increases."

OneRoof editor Owen Vaughan said Rotorua's market was enjoying the "halo effect" of Tauranga's boom and he expected that to continue in 2019.

"While the figures suggest that buyers are less active during the lead-up to the holiday period, the fact that sales prices are holding or increasing indicates that the major factors determining price in Rotorua are constrained supply, strong demand and historically low interest rates."

REINZ regional director Neville Falconer said the Bay of Plenty market as a whole was the only region to achieve a new record median house price.

"As usual, anything newly listed gets well attended at open homes. New listings dropped by 21.5 per cent year-on-year, and inventory fell by 1.5 per cent year on year.

"Once the holiday period comes to an end, it will most likely be business as usual with a healthy and stable market."