Trend is back up for our region’s house prices
Most suburbs across Tauranga and the Western Bay have increased in average value over the past three months as local real estate agents express optimism. The rise comes as the property market begins to show signs of recovery from an overall slump since the Covid-19 pandemic.
A OneRoof Property Report released today with data partner Valocity shows that, in the past three months, all but eight suburbs across Tauranga and the Western Bay increased in value. Pukehina’s average property values increased the most, jumping by 5.4 per cent, followed by Parkvale at 4.3 per cent. Bellevue and Maungatapu also netted increases in value in the 4 per cent range over the period.
The value shifts have prompted optimism among agents, who have described the current market as a “more even playing field”.
The report also shows Tauranga’s longerterm property slump continued, with the average property value down compared with October 31, 2022.
In Mount Maunganui, where the average property value is reported at just over $1.4 million, property values fell by 8.4 per cent in the year to October 31.
According to OneRoof’s report, Tauranga’s cheapest suburbs have also shown a drop in average value. The biggest change was in Parkvale, where the average fell by 5.2 per cent in the past 12 months to $656,000.
But house prices across Tauranga are still higher than they were before the Covid-19 pandemic.
Eight suburbs — Katikati, Te Puke, Welcome Bay, Tahawai, O¯ mokoroa, Minden, Aongatete and Whakamara — saw drops in average value over the past three months. The biggest difference in the past 12 months was recorded in Katikati, where the average property value fell by 7.6 per cent to $785,000. However, Pukehina property values were up by 51.3 per cent on pre-Covid times, while the Western Bay district as a whole saw average property values increase compared with before the pandemic.
Real estate agents said the stabilising market was a reason for optimism for both homebuyers and sellers.
Ray White Tauranga and Bayfair director Rodney Fong said prices had stabilised in the past three to six months.
“There is more certainty for sellers as to what they can expect to sell for, in stark contrast to the price declines experienced in 2022.”
Fong said the numbers meant sellers could be cautiously optimistic and promised better value for buyers.
“[It makes for a] more even playing field between buyers and sellers,” Fong said.
“Buyers still have particular needs which are unique to each buyer. For example, living close to schools, family and work.
“A stabilising market should allow all parties more certainty in their planning.”
Fong said he had seen more first-home buyers in the past six months. “Investors are still mostly on the sidelines, not active as yet.”
Fong said his advice to buyers and sellers was not to put their lives on hold, waiting for the market to change in their favour.
Realty Group managing director Heath
Young said OneRoof’s data was very much aligned with the activity Eves and Bayleys had seen.
“The property market at the moment is showing real signs of positivity, with pricing stabilised and now showing three-month gains.”
Young said Realty Group had seen a “real lift” in new listings over the past two weeks.
“[This] is also a strong signal that the market is returning to normal.”
Young said the data also showed the impact of more first-home buyers being in the market, with many lower-priced suburbs experiencing the largest gains as there was more competition for the same property.
“This data positively supports both home buyers and homeowners because it provides a more certain and efficient market, especially with the increased listing activity.”
What does OneRoof’s report mean for mortgages?
OneRoof editor Owen Vaughan said Tauranga’s property market was “looking up” after prices did “slide quite a lot” from their peak in January 2022.
“We’re starting to see a pick-up,” Vaughan said. “Things are starting to bounce back.”
Vaughan said he expected to see more action around the beach suburbs over the summer and heading into the new year, with more listings expected in January and February 2024.
“It will start to feel like a normal summer market, and those tend to do well.”
Vaughan said property prices had slumped but mortgages had gone “sky-high” this year.
“Now, you’re looking at mortgages of 7 per cent and above. That has wiped out that sense of affordability, because most buyers are curtailed by what they can afford in terms of mortgage.”
However, Vaughan said the slump had meant investors were largely out of the property market, leaving an even playing field for first-home buyers to compete against each other. “Prices are steadily rising,” Vaughan said. “So investors might be back on the market sometime soon.”
Vaughan said for now, he expected buyers to remain “gun-shy”. “Until people get more certainty around what the market will do, they will want to wait and see.”