Tauranga property prices up

Tauranga property values have risen by 1.6 per cent in the last three months with the median house price in Tauranga $359,500.

Property valuer Paul Thomas says the only thing contributing to positive market results right now are the low interest rates being offered by the big banks.

“We’re not seeing any major pick up in the property market,” says Paul.

“The demand isn’t really there right now. There’s nothing driving the market. Most vendors are in a better position than they were this time last year but if anything it is still a bit of a buyers’ market,” says Paul.

Sales volumes for July 2012 compared to July 2011 are up almost 14 per cent, with noticeable strength coming through in Rotorua, Taupo and Gisborne, although sales were slightly weaker in the Eastern Bay of Plenty.

According to the latest figures released by REINZ the median house price in Tauranga increased from $342,500 in June 2012 to $359,500 in July 2012.

Mount Maunganui and Papamoa recorded a drop in the median house price from $416,000 in June to $389,000 in July.

Nationwide Compared to June sales were down more than 8 per cent with the two major cities recording the biggest falls in volumes.

The Bay of Plenty’s days to sell eased a further three days in July, from 56 days in June, to 59 days in July.

While the trend in sales volume continues to improve the trend in the median price remains resolutely flat, with the median price largely constrained to a band between $300,000 and $325,000 in the past five years.

In contrast to Auckland, values in both Hamilton and Tauranga remain well below the 2007 market peak, by 9.1 per cent and 10.3 per cent respectively.

Nationwide residential property values have risen in July according to the latest QV index.

Values are up 2.2 per cent over the past three months, 4.6 per cent up over the past year, and are now only 0.8 per cent below the previous market peak of late 2007. In inflation adjusted terms values are 13.1 per cent below peak.

QV research director research director Jonno Ingerson says the relatively strong increase in nationwide values can be attributed primarily to an increase in the main centres, particularly Auckland and Christchurch.

“There are initial hints in this latest data that values may be levelling in Tauranga and Dunedin after increasing for the past few months, while values in Wellington remain flat,” says Jonno.

“Across most of the main centres listings remain relatively tight leading to less choice for buyers. In Auckland this has led to a sellers’ market with prices pushing upwards, while Wellington is showing the first signs of heading that way too.

“First home buyers are also active, spurred by low mortgage interest rates. This is starting to encourage property investors and small developers back into the market, although investors are now careful to ensure their purchases return a decent yield rather than relying on capital gain.

“There has also been an increase in activity in the middle to upper range of the market which can possibly be attributed to people coming back into the market after having held off for several years” says Jonno.

“For much of this year sales activity has been well above the previous two years. A measure of confidence seems to have returned for many buyers, albeit measured confidence.

"Looking back over the last 30 years, the number of sales usually reaches a low point in June before increasing every month from now until November. We expect sales volumes to follow that trend again this year, although if the lack of quality listings continues then this may prevent otherwise enthusiastic buyers from purchasing” says Jonno.