The Tauranga housing market continues to rise with home values up by 24 per cent year on year and 4.3 per cent over the past three months, with the average value in the city now $672,197.
According to the latest monthly QV House Price Index data, Western Bay of Plenty home values rose 23.0 per cent over the past year, but fell by 0.6 per cent in the final quarter of the year.
The average value in the Western bay district is now $571,520, says QV homevalue Tauranga registered valuer David Hume.
“We have seen a strong start to the year in the Tauranga housing market following on from good growth throughout 2016.
“The announcement and immediate implementation of the new nationwide LVR restrictions in July saw a cooling off in the Tauranga market especially for investment properties toward the end of the year, although agents are reporting improved interest and sales volumes in recent months.”
David says the Western Bay saw good growth in 2016 as it represented better ‘value for money' in comparison to Tauranga
But ‘value growth' is slowing now due to fewer investors being active in the market, he adds.
“Rents have continued to increase throughout 2016, with an average three bedroom house now renting for $100 more than it did two years ago.
“The prestige market has shown good growth over the last six months with a number of sales in excess of $1.5 million, on the back of a strong stable economy and cashed up Auckland buyers looking for a lifestyle change.”
David says building costs have also escalated over the last two years, with standard 180 square metre build costing $1800-$2100 per square metre for an all-inclusive package, and about $2400-$2600 for two storey homes.
Tauranga price index relative to peak. Graph: QV
Across New Zealand, the latest House Price Index shows residential property values for December increased 12.5 per cent over the past year, with values rising by 1.3 per cent in the past three months alone and are now 51.5 per cent above the previous market peak of late 2007.
When adjusted for inflation, the nationwide annual increase drops slightly to 12.2 per cent and values are now 28.5 per cent above the 2007 peak. The average value nationwide is $627,905.