Local buyers are driving sales in Tauranga’s most expensive suburbs, with Aucklanders lagging behind in the rush to get a prime beach spot or luxury home in the city.
Simon Anderson, managing director of Bayleys and Eves real estate for the Bay of Plenty, said that sales activity in Tauranga was high in the lead up to Christmas.
The latest OneRoof figures show the city's average property value grew 6.3% ($72,000) to $1.222 million in the three months to the end of December.
Anderson said that demand for properties in the $5m-plus price bracket was strong, but there was a shortage of stock at that level. For buyers with budgets of around $2m there were more options, however.
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Anderson said that the much of market activity was being driven by locals, noting that the days of Auckland and Waikato buyers accounting for more than half of the sales in Mount Maunganui and Papamoa Beach were over.
“Now they’d only be 10%, maybe 20% of sales. Local buyers are very strong. They’re buying in big numbers in Papamoa.”
A recent listing by one of Anderson’s agents, a modern four-bedroom home on Marine Parade, in Mount Maunganui, is typical of the type of home top-end buyers are snapping up.
The landmark waterfront property, which is marketed by Sharon Hall, is for sale by negotiation and has an RV of $6.68m.
At the end of last year, fellow Bayleys agent Kay Ganley sold a neighbouring home for $6.45m, more than twice its RV of $2.91m.
A house on Marine Parade, in Mount Maunganui, recently sold for $6.45m. Photo / Supplied
Cam Winter, an agent with Oliver Road, said that the recent hikes in interest rates had not affected the top end of the market.
“In the last part of 2021, the rich got richer. Our highest value properties are the ones getting the enquiries,” Winter said, pointing to a sprawling five-bedroom property the company listed just before Christmas on Sunny Downs Drive, in Bethlehem, which has an asking price of $5.85m.
“It's called The Godfather and is a 602sqm Italian-style home on 3952sqm of land. We expect strong local and out-of-town interest in the property, which is likely to set a new sale price record for the Tauranga side of the bridge.”
“It’s really telling us that these people aren’t affected by interest rates. There’s been a steady stream in the past few weeks of Aucklanders with $3m to $4m to spend who e interested in a permanent move. They want these resort-type places. Some of them are young couples in their 40s going in with parents in their 70s so can [afford to] spend on a family compound.”
Winter said buyers are looking as far as Te Puna for what he calls “holiday at home” properties, and are often switching their wealth from investments to put into an expensive home they can enjoy.
A sprawling Italian-style estate on Sunny Downs Drive, Bethlehem is asking $5.85m. Photo / Supplied
Winter said that large home on big sites are breaking price records in Tauranga’s fringe suburbs: in November, a five-bedroom home on a 2136sqm site on Bethlehem Road, in Bethlehem, sold for $3.15m, and in December a five-bedroom home on a 3814sqm site on Cotter Way, in Tauriko sold at auction for $3.4m.
David Cattanach, branch manager for Powers real estate agency, said that Aucklanders were still a force in the Tauranga market, with some Auckland buyers snapping up properties at auction for between $1m and $2.5m, sight unseen.
“We have been pretty busy but there are still not enough listings to meet demand, to replenish what we sold at Christmas,” he said.
“As long as vendors are prepared to meet the market, there is growth still there and to be fair, most vendors are very realistic,”
Simon Short, Property Brokers regional manager for Waikato and Bay of Plenty, said that buyers unable to meet the competition in Tauranga were heading further around to Te Puke and then towns like Whakatane and Opotiki.
A five-bedroom lifestyle property on Cotter Way, in Tauriko, recently sold for $3.4m. Photo / Supplied
“There’s been a lot of migration to this neck of the woods in the last five or six years, people relocating for work.”
Short said his agents noticed a big clearance rate of stock in the $1.8m to $2m price bracket.
“There’s big buyer competition from local money – a lot of money in kiwifruit, huge wealth retained from the dairy farm being spent on Oceanbeach Road, a lot of money floating around.”
