Tauranga's top five performing suburbs for value growth revealed
Move over Mount Maunganui and Pāpāmoa, a new Tauranga suburb is taking over at the city's new hot spot.
Tauriko has topped the charts for growth in property values over the last 12 months.
The latest OneRoof/Valocity Property Report showed the median value in Tauriko jumped a massive 19 per cent to $136,1500 in the last year.
Gate Pā followed with a 9 per cent annual value increase to $475,000, while values in Hairini rose 5 per cent to $519,500, 4 per cent to $607,000 in Welcome Bay and 4 per cent to $503,500 in Judea.
Meanwhile, values dropped 2 per cent in Matua to $724,000, 2 per cent in Poike to $438,000, 1 per cent in Bellevue to $526,000, 1 per cent in Tauranga Central to $668,500 and 1 per cent in Bethlehem to $784,000.
Valocity director of valuation and innovation James Wilson said Tauriko appeared to have experienced strong value growth when compared to other Tauranga suburbs.
However, he said it was important to look at what influenced the drive in value growth.
Wilson said only 13 residential market sales were recorded in Tauriko in 2018 compared to 543 in Pāpāmoa, 378 in Maungatapu and 229 in Pyes Pā.
"We quickly see that this suburb can be described as being relatively inactive," he said.
"When we look into the composition of these sales that have occurred in Tauriko, we see that the properties which sold throughout 2018 were generally of higher value than those which sold during 2017."
The boom years appear to be behind Tauranga, with the new data showing the rates of house price growth had stalled in the last year.
The median value for all properties in the city grew just 1.9 per cent to $655,000 in the last quarter and 3.3 per cent year-on-year.
Wilson said only two suburbs - Gate Pā and Poike - now had median values of less than $500,000 as a result of the rapid value increase in Tauranga during the last three years.
"When we look into the journey that the Tauranga housing market has experienced over the past two-to-three years we see a classic example of the 'catch-up' or the 'ripple effect' in play," he said.
Matua, Bethlehem and central Mount Maunganui had reached a point where their entry-level property values were high enough to motivate people to start looking elsewhere, Wilson said.
More affordable areas such as Gate Pā and Poike had started to become more appealing particularly to first-home buyers.
"This is evident in the percentage of new mortgage registrations to first home buyers who accounted for close to 30 per cent of all registrations in these suburbs during the last quarter," he said.
"We would expect the rates of this house price inflation to slow as we approach the middle of the year."
Wilson said the Tauranga market was overall significantly softer compared to the same period two-to-three years ago.
He expected the historically low-interest rates, constrained supply levels, lack of market confidence and a "wait and see" approach being adopted by many market participants to hold house price growth at "subdued levels" for some time.
Classic Builders director Peter Cooney said the reason for the residential market slowdown in the Bay of Plenty was because of a lack of land and affordability of land.
"We have a shortage of land in the Bay of Plenty and it is going to get worse in the next 12 months," he said.
Cooney said the demand was still strong, but the supply was very limited.
"When you put things out of reach, of course, things are going to slow down," he said.
The Bay had only 12 to 15 months of land supply left before the region would hit "dire straits", Cooney said. "We need to plan further ahead, like 20 to 30 years ahead."
Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said the Tauranga property market had seen record highs and growth in the last few years, which was not sustainable.
"What we are witnessing now is best described as a "normal" market. It means there is more choice for buyers."
Anderson said rising median values and supply slightly ahead of demand was helping to steady the market, and he expected that trend to continue throughout this year.
Tauranga Harcourts managing director Simon Martin said Tauranga had surpassed the peak market in 2016 to a more "normalised" market.
There were more properties on what was a more "steadied" market, which was good for both buyers and sellers, Martin said. "It gives people more confidence."
General manager at New Zealand Sotheby's International Realty Bay of Plenty, Richard Laery, said the market was still very active with 14 groups through an open home last Sunday.
"Buyers are a bit more cautious and making sure they are doing their homework before purchasing," he said.
He expected to see more of a plateau in home values across the city, However with continued strong interest and buyer activity on good stock in the next few years.