Home sales surging as Test looms
Govt policy spurs rush in sales as Rotorua median price hits record
Agents say a sudden rush of property sales in Rotorua last month reflected efforts to get deals over the line before big changes to Government housing policy kicked in.
The number of properties sold skyrocketed in March — including more than a dozen over the $1 million mark — driving the city to a new record median house price of $650,000.
The latest Real Estate Institute of New Zealand figures show the city had 114 sales last month compared to 78 in February and 82 in March last year, when New Zealand went lockdown.
The median price was up 5.3 per cent in a month, from $617,000 in February, and a whopping 35.4 per cent from the $480,000 median a year ago.
Rotorua’s REINZ spokeswoman and First National principal Ann Crossley put the rush in sales volumes down to the Government’s housing plan changes being “clearly heralded”.
People wanted to get in before the bright-line test doubled from five to 10 years, she said. The change means any gains on a residential property that was not the family home will be taxed if the property is sold within 10 years of purchase.
“People just got in shows us.”
Crossley said there were at least a dozen or more sales across all price brackets, including 17 properties over $1 million sold last month.
That included lifestyle and dairy properties, she said.
She said there was a “real mix” of buyers including people buying first homes, owner-occupiers downsizing and investors.
“What we did notice with the listings was people were realising they need to be able to sell to buy. But they are not prepared to sell unless they had something they could buy.
“It’s really the only way. Unless they have got the capability to still own and buy something else unconditional if they want to buy something else they have got to sell.
“It’s a good idea to put some protections in place but it does slow
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Rotorua Professionals Mcdowell Real Estate co-owner Steve Lovegrove said when he first arrived at Rotorua $650,000 would buy a nice property on a two-acre lifestyle block.
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“Now it gets you an average house in town,” he said. “In six years what your money can buy you is a lot less.”
Lovegrove said there was a rush of sales after the Government announcement and he believed people moving to Rotorua for the lifestyle were driving up the prices.
Just this week, a property expected to sell in the $700,000 price bracket had 13 offers and the bulk of buyers were out-of-towners wanting to move to Rotorua, he said.
Lovegrove said rental properties were now being snapped up by firsthome buyers.
“I think Rotorua is shifting from typically a rental area to a first-home buyer one. We are seeing that demographic of Rotorua migrate slowly.”
Lovegrove said million-dollar properties weren’t on the market for long
and he was calling it the “mansion effect”, which saw investors sell their homes and investment properties for something bigger.
He hoped the rise in house prices would give people the confidence to invest in developing property so the city can expand its portfolio.
“We need investment in building.” Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson said people were still seeing value in Rotorua.
“There’s been a number of very good sales around the lakes as people with a lot of cash look for those prime investments.”
Tremains sales manager Megan Davies said the rise in prices reflected the type of property coming to the market and not the average house value.
“This time last year ahead of new more stringent regulations around rental property standards, investors will be getting rid of excess stock.
“This year they are re-evaluating and if they have held it for less than five years they are looking at the impact of the bright-line test.”
Davies said a significant number of owners were considering selling a rental property or lower value home, only to withdraw because of the bright-line.
“If anything the move to 10-year holding of investment properties will impact stock further and reduce the number of homes available in the lower range for first-home buyers.”
Harcourts Rotorua sales manager Michelle Matthews said the new median price record was a “fantastic result” and reflected continued confidence in the city’s market.
“Buyer demand has been unprecedented taking advantage of lowinterest rates.”
Matthews said sales were across all sectors, including first-home buyers and investors looking to secure property across all suburbs.
Median prices across the region climbed 24.5 per cent year-on-year to $822,000 from $660,000 in March 2020 — but dropped 3.1 per cent to $822,000 from $848,250 in February.
Tauranga’s median house price also dropped 0.4 per cent to $901,000 from $905,000 in February despite skyrocketing 23.4 per cent year-onyear from $730,000 in March 2020.
REINZ regional director Neville Falconer said supply levels continued to be an issue for the region.
There was a 7.8 per cent drop in new listings from the same time last year and a 32.9 per cent decrease in available stock, leaving just seven weeks of available inventory.
“Low levels of stock and high levels of demand have resulted in strong competition for good properties.”