Aerial photo of Rotorua. Photo / Felix Desmarais / LDR
Rotorua’s median house price climbed $40,000 – about $1290 a day – last month, new data shows.
The latest Real Estate Institute of New Zealand report showed the lakeside city bucked the nationwide trend of
falling house prices.
The median house price in Rotorua climbed 6.3 per cent to $675,000 from $635,000 in July.
It was up 8.9 per cent from $620,000 in August last year.
In Tauranga, median house prices rose 3.8 per cent – or $35,000 – to $960,000 in August.
The national median, meanwhile fell from $810,000 in July to $800,000 last month, equivalent to around $322 a day.
Harcourts Rotorua business owner Wayne Pamment said the city’s median house price had lifted for the second month in a row from $615,000 in June.
“This does align with what we have seen in open home activity and offers being presented to vendors from a more active buyer pool.
“We believe we saw a faster and more sudden drop in values from March to June and every indication is that the provincial regions will fare better through this spring versus the major urban cities like Auckland and Wellington.”
Pamment said mortgage brokers had reported a lot more activity from first-home buyer applications and the number of approvals coming through.
Even inquiries from investors had increased with offers being negotiated on blocks of flats with good returns, he said.
“A lot of this is based on confidence given a levelling of interest rates even though the OCR – Official Cash Rate – continues to climb, and also a stabilisation of rental values (that haven’t plunged as first thought).
“All these things contribute to confidence and we are now experiencing that wave of sentiment of ‘let’s get on with life’ given the lack of transactions from April to June.”
Pamment said a lot of vendors and buyers were now putting their plans into action.
Stock levels were likely to pick up again as vendors consider selling in the spring and early summer, he said.
“But with buyers in the field too, it feels like it may just level out and become a more balanced market, with good opportunities for both vendors and buyers.
“Vendor requests for appraisals have certainly increased of late and we are discussing their options with them.
“We believe that vendors are more in tune now to the change in values and feel less anxious knowing they will be buying and selling on the same market, hence the gap between expectations from buyers and sellers is closer.”
The Mortgage Centre director Praveen Bhati said he had “absolutely” seen a rise in first-home buyer inquiries since the move to lift price caps for First-Home Grants in May.
The new price cap for using a grant to buy an existing or new home in Rotorua is $525,000, up from the previous $400,000 (existing) and $500,000 (new).
“The confidence is coming back.”
Interest rates rumoured not to be as high as expected and Kāinga Ora housing schemes helping people into their first homes were also helping, he said.
Bhati said he had an average of about eight or nine appointments with first-home buyers a week and at least half of those he was lodging applications for.
“Last week I lodged about 22 applications.”
Bayleys Rotorua branch manager Beth Millard said Rotorua bucking the trend was a “pleasant and well-deserved” change considering the city generally tracked behind others.
“The top end in Rotorua has increased pretty dramatically over the past couple of years.
“Conversely what has happened with this market correction is the volume of lower-end sales has significantly increased in ‘higher value’ competing cities.”
Millard said stock levels were more than double what they were this time last year, and this was starting to make an impact, taking the heat out of the market.
“During the last big market high, we all learnt a new phrase FOMO – fear of missing out – this has all but gone except for unique properties.”
Vendors with their properties for sale now were generally a little more stressed than previously as homes were taking longer to sell.
“Most offers are conditional and with bank lending continuing to be a little tougher to secure, people are naturally a bit more wired.”
Millard said there were more buyers in the market, however, there was more to choose from so they were not overly quick to act.
“Further, often because of bank imposed conditions they are a little more cautious about proceeding to paper without having their ducks lined up in a row first.”
Attendance at open homes had been a “real mixed-bag”, she said.
“There is certainly a higher level of attendance at properties that are new to the market than those that have taken a bit longer to sell.
“The mid to higher end of the market appears to be tracking higher levels of activity than the entry level properties.”
Ray White Rotorua’s principal Jacqueline O’Sullivan said they had seen an increase in activity with homes in good areas and buyers vying for low-maintenance homes.
“And with stock levels increasing, the buyers are now able to take the time to research the market before making their selection.”
O’Sullivan said stock levels have been lifting. This gave buyers more choices but was also the reason why the number of days on the market had risen.
“Buyers’ fear of missing out for a moment turned into fear of overpaying.”
She said, however, house prices and interest rates appeared to be stabilising, putting more certainty back in the housing market.
“We are also expecting to see good levels of first-home buyers and investor activity coming back into the market as well.”
Vendors were market savvy and understood what was happening with current trends in the housing market and there was “positive momentum” among buyers, she said.
“Our open home numbers are showing us that the high-end properties in good areas are consistently achieving a larger number of buyers through the open homes, and while the lower to mid-range price bracket homes don’t have as many attendees, the buyers that do attend are serious about making a purchase.”
REINZ regional director Neville Falconer said stock levels remained high, up 170.2 per cent annually, and new listings also increased 62 per cent.
“Bay of Plenty salespeople say they are still proactively managing vendors’ price expectations.”
Falconer said Rotorua buyers were waiting for easier access to finance and for prices in the region to ease.
“More sales were subject to conditions such as house sales in August.”
Attendance at open homes was inconsistent and the most active buyer groups over the course of the month were owner-occupiers and first-home buyers, he said.
“Rotorua salespeople say that the local election coming up in October may interrupt the region’s usual spring lift in activity.”
Bay of Plenty
Compared with August 2021
• Median price up 6.5%
• Sales count up 2.5%
• Days to sell increased 27 days
Compared with July 2022
• Median Price up 4.1%
• Seasonally adjusted median
price up 2.6%
• Sales count up 1.5%
• Seasonally adjusted sales
count down 0.6%
• Days to sell increased 3 days