Market Stability: Bay of Plenty Prices Hold Steady Amid Economic Challenges
The median price for Bay of Plenty decreased 6.0% year-on-year to $780,000.
“Owner occupiers and first-home buyers remained the most active buyer group.
Most vendors are accepting of the current market expectations, with some vendors struggling with a potential financial loss. Open home attendance was steady, although quieter in the last weeks of June, with newer stock getting the most attendees.
Auction activity varied across the region, with properties positioned generally well to see outside of the auction room.
Factors such as the general economic climate, job uncertainty, and the cost of living influenced market sentiment. Buyers’ lack of urgency was also a factor, with buyers opting to wait for the “right property.”
Local agents cautiously predict a similar situation over the coming months, with hopes for more positivity and confidence in spring.” Jen Baird REINZ CEO.
From Sarah Wood, CEO realestate.co.nz
Nationally, and in the Bay of Plenty, Manawatu/Whanganui, Waikato, and Wairarapa, prices remained static between May and June, with changes of less than 1.0%.
“Prices have fluctuated between $860,000 and $890,000 since November 2022. That’s a year and a half of buyers and sellers facing some level of certainty around prices, which is a silver lining in an uncertain economic environment.”
In the meantime, Wood advises sellers to ensure their property is well marketed, work with a real estate agent experienced in selling their type of property and take the time to understand market insights and local price expectations:
“Understanding your local market will be more important than ever now that DTI ratios will cap how much a buyer can spend at six times their income.”
Wood predicts that buyers and sellers are likely experiencing confusion. She expects that some will be watching and waiting to see the impacts of new regulations on the market before transacting:
“Typically, Kiwis don’t like to transact during uncertain times. Right now, there’s a lot of economic uncertainty, acronyms to decode, and property market regulations to process.”
“The good news is that the slower pace of the current market allows buyers and sellers more time to conduct due diligence and seek expert advice.”
She adds that the most common method of sale during June was ‘display price’, which makes the negotiation process more transparent.
A word from our Director - Tracey East
Reflecting on the latest market statistics report from REINZ, June’s data reveals the lowest sales volume since the Global Financial Crisis, although prices have remained stable. Throughout June, many offers were not accepted by sellers. However, July has shown a notable shift, with sellers adjusting their prices downward to meet market demands, resulting in an increase in accepted contracts. It will be interesting to see the July statistics when they are released by REINZ in August. We predict that while sales volume will increase, prices are likely to trend downwards.
Rental Trends
The rental market in Tauranga is experiencing dynamic changes. The median rent price has increased by $1 compared to last month. We anticipate the market to stabilise and see more stock come to the market with the change to the bright line test, investors will have more faith to invest. We still have families relocating to the Bay and don’t see the rental market slowing down any time soon.
Nationally, renters had plenty of options last month, with new rental listings up by 26.9% compared to June 2023. Despite a 10.4% decrease from May’s unseasonal spike, this marks the second consecutive month of high new rental listings. Financial pressures on investors, such as converting short-term rentals to long-term, are likely contributing to this trend.
“Some landlords, initially planning to sell under new bright-line rules, have decided to return their properties to the rental market after evaluating average asking prices,” explains Wood.
The average weekly rental price increased by 5.9% to $653 nationally, with all regions except Wairarapa seeing year-on-year rises. The national average rental price slightly dipped by 0.9% from the record high of $660 in May. Waikato saw an all-time rent high of $572, achieving record rental prices in three of the last four months.
Despite the surge in new rental listings, average rental prices remain largely unaffected. “Landlords report a challenging environment. Even after lowering prices, interest from potential tenants is low, indicating a softening rental market,” Sarah Wood, CEO of realestate.co.nz, notes.
Suburb Spotlight
Otūmoetai market insights for the last 12 months – realestate.co.nz
● Median Sale Price $875,000 with 38 days to sale – Up 0.3%
● Median Asking Price $850,000 – Down 3.5%
● Median Rental Price $650 per week with 17 days to rent – Up 3.1%
Property Supply in Otūmoetai
● Listed for Sale in the last month 9
● Sold in the last 12 months 134
● Listed for Rent in the last month 10
● Most popular properties for sale: 3 and 4 Bedroom Houses
Rental Supply in Tauranga
● No. Bonds Lodged in Tauranga in May 2024: 1,029
● No. Bonds Closed in Tauranga in May 2024: 1,068
● No. Bonds Active in Tauranga in May 20204: 12,417
● Median Rental Price: $700 per week
Article Sources: reinz.co.nz / corelogic.co.nz / realestate.co.nz
