Section sales boost real estate market

The Rotorua real estate market has hit "rock bottom" but there are signs the situation is improving with a higher number of sales in January than usual, and several sections sold in what is traditionally a quiet month.

Figures from the Real Estate Institute of New Zealand (REINZ) show 50 house sales in the region during January, 16 more than the previous January.

It was the highest January total since 59 sales were recorded in 2009, but the number of properties sold last month was the lowest monthly total since January last year.

REINZ Rotorua spokesman Ian McDowell, of McDowell Professionals, said January was always a slow month.

"I think we have hit rock bottom, but we are on our way up. But it's going to be long and slow."

The median sale price for January was $230,000 - the third-lowest monthly median sale price in the past year.

However, Mr McDowell said the low median sale price and the larger number of properties sold in January were signs investors were getting back into the property market.

Mr McDowell said a lot of the properties sold for less than $200,000 last month, with the highest sold for $410,000, which was quite low.

It was also taking longer to sell properties last month - 66 days - the second-highest figure recorded in the past year. In July, it was taking 41 days to sell. Mr McDowell said he was not too concerned about the time it took to sell because if a property was correctly priced it would sell reasonably quickly.

He said six sections were sold last month indicating the market was starting to move with new homes being built. Two sections were sold at Hamon Park in Pukehangi, two at Lynmore Rise off Iles Rd, and one each at Brunswick and Western Heights.

Mr McDowell said a total of 50 sections were sold in Rotorua last year, compared with 239 in 2005 and he hoped the number of sections sold last month was a sign the market was improving.

He admitted the real estate market had been hard for agents.

"We are optimistic that it's going to improve."

He said there were 743 properties sold last year - up on the 728 sold in 2010.

Mr McDowell said he was fairly confident the number of properties sold this year would be up on last year.

Meanwhile, the number of homes sold in Taupo last month was 36 compared with 20 in January, 2011.

The median sale price in Taupo in January was $310,000, up on December's figure of $275,000 but down on the $343,750 in January last year.