Tauranga bucks trend as house values hold steady

Residential property values in Tauranga remained virtually unchanged during the September quarter, making it one of the few main centres in New Zealand to avoid a decline. The latest QV House Price Index shows Tauranga’s average home value increased by 0.1% in the three months to the end of September, lifting to $1,050,221.

Despite the subdued quarterly result, values in the city are 1.6% higher than at the start of the year and 2.5% above the level recorded 12 months ago. The figures contrast with the broader Bay of Plenty region, where every other district recorded a fall in average home values over the quarter.

Rotorua was the only other centre in the region where values remained above year-ago levels, edging up 0.2%. Nationally, residential property values fell by an average of 1.5% during the quarter, an improvement on the 1.9% decline recorded in QV’s previous report. The average New Zealand home is now worth $892,580, down 1.9% since the beginning of the year and 0.9% lower than this time last year.

QV national spokesman Simon Petersen said there was little evidence that spring had sparked a widespread housing market recovery. “There are some minor green shoots here and there, mostly in the South Island, but it’s still overwhelmingly one-way traffic, with buyers firmly in the driver’s seat,” he said.

“There’s certainly no spring in the housing market’s step. Buyers remain wary, they’ve still got plenty of choice, and there’s very little sense of urgency given the wider economic and political context.” Interest rates and the approaching general election were also encouraging buyers to take their time, he said, helping to maintain downward pressure on values across much of the country.

Among New Zealand’s major urban centres, only Queenstown (+3.1%), Invercargill (+0.5%) and Tauranga (+0.1%) avoided quarterly declines. At the other end of the market, values fell by 3.2% in Gisborne, 3% in Wellington and Whangārei, and 2.5% across Auckland. Petersen said regional differences were becoming increasingly apparent, with property markets in Southland and much of Otago recording gains, while values generally softened across Auckland, Wellington, Waikato and the Bay of Plenty.

“The economic recovery remains uneven and we’re seeing that reflected in property values. There really isn’t one consistent housing market right now. It’s still a patchwork of pluses and minuses, although mostly minuses.” He said the November 7 general election was contributing to a “wait-and-see” approach among some buyers and investors, alongside wider concerns about employment confidence, borrowing costs and the volume of properties available for sale.

While spring was expected to bring more listings and market activity, Petersen said increased buyer demand would not necessarily translate into higher prices. “Until buyers feel a greater need or confidence to act, vendors are still going to have to compete pretty hard for their attention.”