Bay of Plenty house prices hit record high: Ōpōtiki ‘s leap almost 50 per cent

Bay of Plenty median house prices have hit a record high, with Whakatāne and Ōpōtiki values climbing more than $150,000 and $200,000 in the month to January.

The Real Estate Institute of New Zealand’s monthly report showed the Bay’s median house price was $942,000, a 22.8 per cent increase since January 2021.

Ōpōtiki District saw its median house price increase by 48 per cent – from $450,000 in December 2021 to $666,000 – in January 2022 and 81.5 per cent – from $367,000 – in January 2021.

Whakatāne District also reached a record median price of $878,000, 25.2 per cent higher than the previous month’s $701,000.

This was a 56.8 per cent increase in a year, from $560,000 in January 2021.

Rotorua’s median house prices dropped 6.1 per cent to $657,000 from $700,000, while Tauranga’s climbed 3.9 per cent to $1,050,000 from $1,011,000.

REINZ regional director Neville Falconer said most buyers in the Bay of Plenty were owner-occupiers.

“Agents reported an influx of out-of-town buyers, but the expected impact of Auckland’s borders opening on the Bay of Plenty market did not eventuate.

Greg Purcell, owner of Ray White Whakatāne, said the huge month-to-month increase “could be a real anomaly”.

“Sometimes it’s what has sold in that month, because that can throw out everything.”

Purcell said those buying expensive land or houses were often already wealthy, so were less likely to “go cap in hand to the bank”.

He said rents tend to go up with the market, which makes saving for a house more difficult.

“The first-home buyers are probably the people getting hit the most.”

But, he said the increase over 12 months was a better representation of the market.

He said Covid-19 had been predicted to tank the market in 2020, but the opposite had happened.

He said the market was in “previously uncharted real-estate territory, in terms of the speed of the rise of the market.”

“Boom, Covid hit, and the rest is history really. The real question is what it looks like looking forward.”

“We all know it’s gone through the roof, but it can only keep doing that for so long.”

He said he hoped for a “steady, stable evening out” of the market from here.

He said some vendors had unrealistic expectations of what the market could give them.

“There’s always a lag between what the market is doing and the public’s perception of what the market is doing.”

Ōpōtiki District mayor Lyn Riesterer said she was not surprised that prices were going up.

“We already realise that we have a housing issue,” she said.

“We’re still very concerned about the immediacy of our housing needs.”

She said the district’s economic development meant more people wanted to move there, increasing demand.

“People are looking outside other areas that are just now costing huge amounts.

“We’ve got to step pretty nimbly to try to catch up.”

She said locals in the district were facing “affordability problems” trying to get into the housing market.

“There’s a disparity in who can afford to buy in and who can’t.”

Riesterer’s council had a number of initiatives underway to solve its housing problems, including working closely with Te Whānau-ā-Apanui, bolstering the consent process, and working with Kāinga Ora.

“We’re trying to work through with the community and really develop a plan that’s going to comfortably take us forward for the next fifty years.”

“We’re getting to the right place with that.”

Whakatāne District mayor Judy Turner said a number of factors may have contributed to her district’s jump, including its growing population.

“We are concerned about the effect that the increased cost of house ownership and renting – combined with rising prices for essential items such as food and petrol – is having on our citizens.

“Government interventions may have had some impact on the housing market, but not to the extent many expected,” she said.

“However, rising interest rates and other internal and external factors may take some of the heat out of the market over the coming months.”

She said the district was trying to free up land for development “so that our housing stock can match demand into the future.”

Ann Crossley, owner of Rotorua First National real estate, said the drop in January was “a really low number.”

“It is lower than I would have expected, but it’s way too early to say that’s a trend.”

She said increased bank scrutiny under the Credit Contracts and Consumer Finance Act meant banks were tightening rules for lending.

The restriction meant some people wanting to sell their homes weren’t able to get mortgages for new homes, “so they basically can’t sell.”

She also said first home buyers and buyers, in general, were struggling under the rules.

Source: Read Full Article