A Fresh Start for the Bay of Plenty Property Market in 2025

As we enter 2025, we’re seeing renewed momentum in the Bay of Plenty property market, creating opportunities for both buyers and sellers. While December’s listing volumes were down, January has already shown a strong rebound with an influx of new stock, providing buyers with plenty of options to consider. Sellers can also benefit from the renewed energy that the start of the year typically brings, as buyers refocus their efforts to secure their next property.

At East Realty, we are optimistic about the market’s trajectory and committed to helping our clients achieve exceptional results. Our collaborative approach means every property we list gains exposure through all agencies in the region, enhancing opportunities to connect with the right buyers. Combined with our tailored digital and offline marketing strategies, we ensure maximum visibility and impact for your property.

Looking around Tauranga, the sight of “sold” signs is a heartening indicator of an active market. Properties with realistic vendor expectations are moving, while those priced too high are still lagging. The combination of good market data and improving buyer sentiment has helped align vendors’ expectations with the realities of the market.

At East Realty, we’re here to guide you every step of the way. Whether you’re buying or selling, our experienced team is ready to help you navigate this dynamic market. Here’s to a positive and successful year ahead!

Trevor & Tracey East – Directors, East Realty & East Rentals

After all, selling a property is about realising a maximum return for a substantial investment, so it pays to know upfront who will receive a slice of that pie and how much it will be.

Easing Interest Rates Spark Renewed Buyer Interest in Bay of Plenty

“December is usually a quiet month for the housing market. For New Zealand, sales count was down 27.4% compared to November 2024 and up 1.8% compared to last year. When we adjust the figures for seasonal effects, we see that both percentage movements are notably less than expected, confirming that December 2024 was a particularly quiet month for residential dwelling sales in New Zealand. ” explains Chief Executive Jen Baird.

The median price for the Bay of Plenty increased 1.2% year-on-year to $840,000

“Owner-occupiers and first home buyers were active, with investors noticeably more active than previous months. When vendor price expectations were realistic, their properties sold; when expectations weren’t realistic, their properties didn’t sell. Good factual information and media coverage cemented where the market is at, influencing vendor expectations. Attendance at open homes improved as more buyers started their journey with interest rates easing.

There was a steady improvement in auction clearance rates, with higher bidding numbers and auctions as a preferred method of sale. Local agents report that December was a busy month, considering it was interrupted by holidays.

Market sentiment was positive, and local salespeople said there was a good demand for houses that needed work, suggesting buyers may think the market is at or near the bottom of the cycle.” Jen Baird REINZ CEO

The current median Days to Sell of 46 days is more than the 10-year average for December which is 38 days. There were 23 weeks of inventory in December 2024 which is 2 weeks less than the same time last year.

Compared to December 2023: Median Price is up 1.2%, Sales Count is up 7.9%, Days to Sell is up 4

Compared to November 2024: Median Price is up 1.8%, Sales Count is down -13.0%, Days to Sell is up 2

Source: reinz.co.nz

Thriving in Tauranga’s Rental Market: What You Need to Know

The Tauranga residential rental market remains a dynamic and evolving landscape as we move into 2025. Demand for quality rental properties continues to be strong, fueled by Tauranga’s growing population, vibrant lifestyle offerings, and expanding employment opportunities.

Rental Demand and Supply: Tauranga’s rental market is characterised by steady demand, particularly for family homes and modern apartments in central locations. Proximity to schools, beaches, and shopping amenities remains a key driver for tenants. However, supply constraints persist in some areas, leading to competitive conditions for well-maintained properties.

Rental Prices: Average rental prices have seen moderate growth over the past year, reflecting strong tenant demand and limited new housing stock. Three-bedroom homes remain highly sought after, with rents typically ranging between $600 and $750 per week, depending on location and amenities. Apartments and smaller homes near the CBD and Mount Maunganui attract premium rents due to their convenience and lifestyle appeal.

Key Trends: Sustainability Features: Tenants are increasingly seeking properties with energy-efficient features, such as heat pumps, double glazing, and solar panels, as awareness of utility costs and sustainability grows.

Compliance Focus: Property managers and landlords are prioritising compliance with New Zealand’s Healthy Homes Standards to ensure properties meet tenant expectations and legal requirements.

Shift to Suburbs: Families and professionals are exploring suburban areas such as Papamoa and Welcome Bay for more affordable rental options with easy access to schools and green spaces.

Outlook for 2025: The Tauranga rental market is expected to remain competitive, with continued demand driven by its lifestyle and employment prospects. Investors focusing on quality properties and maintaining compliance will find strong tenant interest, while renters are encouraged to act quickly when suitable homes become available.

For landlords, the evolving market presents an excellent opportunity to capitalize on Tauranga’s popularity by ensuring their properties are well-maintained and effectively marketed to attract quality tenants.

CoreLogic National Property Update

Property values in Aotearoa New Zealand fell -0.2% in December, marking the ninth drop in the past 10 months, according to CoreLogic’s hedonic Home Value Index (HVI).

The national median value now stands at $803,624, which is 3.9% lower than a year ago and equivalent to a drop of around $32,200. New Zealand home values are also still 17.6% below the post-COVID peak, although 16.2% higher than the pre-COVID level from March 2020.

Around the main centres, a slightly more consistent picture is emerging, with Tauranga rising by 0.4%.

CoreLogic NZ Chief Property Economist, Kelvin Davidson said that December’s fall in values at the national level was an apt summary for 2024.

“Since the mini-peak back in February, property values have drifted lower at a modest pace, initially reflecting the high level of mortgage rates, but more recently the weakness of the labour market,” he said.

“December’s mild drop was simply a continuation of that pattern and sums up the market’s soggy performance in 2024.”

He pointed out that there has been a discernible slowdown in the rate of decline in recent months, potentially signalling that the floor for property values could be within reach. “We’re still seeing some sluggish results in Auckland and Wellington, but firmer trends seem to be starting to emerge elsewhere.”

“That would certainly be consistent with the influence of lower mortgage rates, particularly the falls for the internal serviceability test rates at the banks. The popularity of either floating loans or short-term fixes at present is helping those lower rates pass through fairly quickly too.”

“However, job insecurity will still be playing a restraining role, as are the elevated levels of listings available on the market.”

“These ‘conflicting forces’ may remain a key theme for the property market in 2025 as well, with the effects of lower mortgage rates dampened to some extent by a still-sluggish economy and credit restrictions in the form of debt to income ratios.”

Property market outlook: Looking ahead to 2025, Mr Davidson noted that many of the key drivers for the property market might continue to work in opposing directions – such as the supportive influence of lower mortgage rates, but the restraint from abundant listings and labour market uncertainty.

“We suspect that 2025 could prove to be a year of conflicting forces for NZ’s housing market, with the net result being a relatively subdued upturn in sales volumes and property values. Our expectation is that values could increase by around 5% in 2025 across NZ as a whole, which would be pretty subdued compared to some past cycles.”

“The recent falls in property values may well come to an end shortly, but one factor for the year ahead that the market hasn’t had to contemplate before is likely to be the effect of debt to income ratio rules. These may not be a factor for everybody and won’t stop mortgage lending dead in its tracks. But by the middle of the year it certainly wouldn’t be a surprise if the DTI limits are a very common part of the general discussion around NZ’s mortgage market.”

“In addition to an underlying economy which might take a bit of time yet to get back on its feet, the DTI caps are another reason for caution about the prospects for the property market in 2025,” Mr Davidson concluded.

Download the January Housing Value Index HERE

Download the Reserve bank of New Zealand Monetary Policy HERE

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