Property values in the Bay of Plenty are rising but agents in the region report that stock levels remain a problem.
Real estate has been selling at a premium over the last quarter. A recently renovated four-bedroom home on Grenada Street, in Papamoa Beach, sold for $2.035m - more than $1m above RV - while a luxury spread on Phillips Drive, in Oropi, sold for $2.71m - more than $1.3m above RV.
And there are high expectations for one of for a Godfather-style estate in Tauriko, one of the highest value properties to hit the market in recent months.
The latest OneRoof-Valocity House Value Index figures shows the region's average property value has jumped 6.2 per cent ($60,000) in the last three months to $1.034 million, with Tauranga's average property value up 7.4 per cent over the same period to $1.201m (growth in Rotorua, however, has come to a stop, with the city's average property value up just 0.8 per cent to $753,000).
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The Covid lockdown initiated in August has been a factor in the listings slump, with REINZ figures showing 210 sales in Tauranga in September compared to 331 in September 2020, a 37.2 per cent drop.
Simon Martin, owner and managing director of Harcourts Tauranga Central, says the housing market has been restricted by the number of properties being listed. If there were more, they would sell, he says.
The physical absence of Aucklanders in the market, as a result of the Covid restrictions, has been noticeable, with Harcourts putting floor plans on listings to combat those who can’t physically look at a property. “They can look at the layout of the property as well as the photos, and that seems to be helping a lot.”
He says the big step-up in property values in Tauranga hasn’t impacted the market yet.
“The affordability aspect of real estate sorts itself out naturally. If prices go up too high then people don't buy, so people will only buy if they see value for money. At the moment stuff is still selling, so from that point of view the market determines that,” he says.
“It’s been a big step up in value across the board. In the high-value suburbs, of course there will be less people able to buy there.
“Everyone would love to buy in Marine Parade and the Mount but it's all going to be determined by what they can borrow.”
People who can’t afford Marine Parade go one street back, and if they can’t afford one street back they go two streets back, he says.
A four-bedroom home on Grenada Street, in Papamoa Beach, recently sold more than double its RV. Photo / Supplied
Where the market will head next year is unknown, with so many factors out of everyone’s control.
“Covid is the big one. The market stopped when we had Level 4 and there are those sorts of things that could happen which will affect the market.
“There are a few headwinds from a banking point of view; you’ve got interest rates heading up and you’ve got restrictions on lending tightening up as well.”
On the other hand, people still want to move. “They’ve made decisions during lockdown, they want to get out of Auckland, maybe. People still have to upgrade or downgrade, they still have to live somewhere. That's a factor and there's still strong demand, so although there might be a few headwinds next year there's still strong demand.”
This luxury home in Oropi sold for $2.71m. Photo / Supplied
Anton Jones, managing director for Tremains, says despite the lockdown Aucklanders are still looking, and that has lifted the values at the top end of the market.
Tremains sold four properties for over $2m in October, in Papamoa, Te Puna, Katikati and Bethlehem.
While there are big sales, Jones felt the market plateaued over October and November but expects summer to be OK.
“I'm just not sure going into winter what's going to happen next year, with the Reserve Bank signalling that obviously they are putting the brakes on things. So that's a major factor.”
The supply chain for new builds is having an impact in terms of being able to get building supplies, too.
While there is plenty of building going on in the Bay of Plenty, there is less land available, Jones says, which could also contribute to a lack of stock.
The market in the Bay of Plenty’s more affordable suburbs, where the price for a standard first home is upwards of around $700,000, is good, however, and first home buyers are still out there, he says.
“Our lower-priced stuff is still going well. Greerton, Brookefield and Welcome Bay are all very popular areas and they’ve got good school zones.
“Obviously, if you can't buy something in a certain price bracket or you can't afford something in a certain area you're looking at then you've got to go to a different area, a bit of a cheaper suburb.”
Luxury real estate agent Jason Eves, of Oliver Road, says the lack of listings, even at the top end, has had an impact on the market.
The agency has sold everything on its books in the last three months, and expect there to be heightened buyer interest in its latest listing, a seven-bedroom Mediterranean-style residence that has heavy shades of the opulence and style on show in The Godfather movie.
Eves says the estate, which sits on a 3952sqm site, is one of the highest value properties to be listed in Tauranga and is at the pinnacle of the market.
