The latest house price figures from OneRoof show slides in most New Zealand cities, but going against grain is Rotorua, where the average property value has risen in the last three months and one suburb has joined the magic $1 million club.
The city’s average property value jumped 5.6% ($42,000) to just under $800,000 – a stunning turnaround for a market that was showing no value growth in the closing months of last year.
Nationwide, the average property value slid 0.9% ($10,000) to $1.087 million, as rising interest rates, cost of living pressures and tighter credit conditions kept buyers out of the market.
The rise in values in Rotorua was across the board, with Lynmore recording the strongest quarterly growth of Rotorua suburbs with 20 or more settled sales in the last 12 months.
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The high-end suburb on the eastern side of the city saw its average property value grow 8.1% ($76,000) to a record-breaking $1.014 million.
It is the first time an urban suburb in the tourist city has broken a million dollars.
The average property value in Lynmore has grown 8.1% in the last three months. Photo / Stephen Parker
Only Rotorua's tightly held lakeside holiday areas, such as Lake Tarawera and Tikitere, have higher prices and faster growth, but lifestyle properties in these suburbs are rarely put up for sale.
Lynmore abuts the internationally renowned Whakarewarewa forest, with its mountain bike trails, is the closest suburb to the scenic lakes and has views of Lake Rotorua.
Steve Lovegrove, principal of The Professionals Rotorua, said that in a city without clearly defined suburban boundaries, Lynmore stood out.
“If you’re new to Rotorua – and we’ve had a lot of migration from the cities – then the thing you’re looking for is to be near the forest and have lake views. That’s Lynmore,” he said.
While the old part of the suburb is mostly original housing stock from the 1960s to 1980s, owners have taken advantage of their capital growth in the last five years, when prices have nearly doubled, to invest in upgrades and renovations.
“And a better presented house will get a better price,” Lovegrove said.
Lovegrove told OneRoof that homes in Lynmore were tightly held, with family buyers buying their ultimate home to stay put, and the only “outbound” sellers being empty nesters selling to move into retirement homes”. Rotorua’s only decile nine school, and a clutch of new restaurants make this what he calls “the quintessential family suburb.”
The agent expected the high-priced suburb to continue to hold its value, while Rotorua’s lower value suburbs are in a slump.
This house in Iles Road, in Lynmore, sold for $1.438m at the start of the year. Photo / Supplied
While his office brokered Lynmore’s record sale in November, $1.535m for a modest three-bedroom 1950s house and adjacent flat, he said the price reflected the subdivision potential of the 3068 sqm section.
At the beginning of the year a smartly presented four-bedroom house on a 750sqm site on Iles Road, one of Lynmore’s top streets, sold for $1.438m. OneRoof records show the house changed hands nine years ago for $576,000, and three other properties sold last year for between $1.3m and $1.4m.
The 2020 rating valuation on the $1.48m was $890,000, and on the others ranged from $950,000 to $1.1m, but agents all dismiss the council figures as any sort of price guide.
“Rateable values have never been a guide or an indication to value. I totally wish there were no RVs,” said Bayleys branch manager Beth Millard.
She said prices for houses on the newer Lynmore Lake Views development, built in the early 2000s, start at $1m. “They’re good value. A Larcy Road four-bedroom house on 698sqm sold last month under the hammer for $1.1m. At the time, we said ‘far out’ but there’s a shortage of newer, lock up and leave houses on smaller land.”
Lynmore is near the Whakarewarewa Redwood forest. Photo / Stephen Parker
Millard said such good, newer-build properties are lacking in Rotorua, especially Lynmore, so attract good interest. She expects two new subdivisions now on the market will give buyers the opportunity to build higher quality, higher value homes.
Tremains agent Karl Hereford agreed that Lynmore was the suburb homeowners aspired to live in.
“Especially if you’re new to Rotorua and you’re here for lifestyle reasons,” he said.
To get into the suburb, a three-bedroom, one bath renovated older house on a full section might fetch mid-$800,000, he said, while newer three- to five-year old properties with four bedrooms, 2 living, 2 bath are going for $1.2m to $1.4m
Hereford said there was strong demand for single level brick and tile homes, so that competition was continuing to drive up prices.
“Next time around, you’ll be calling to ask me when do we crack $2m,” he said.
