Homeowners who sold a property in Tauranga in the first quarter of this year made a median profit of more than $230,000, according to new data.
However, figures from CoreLogic’s latest Pain and Gain report also show the other side of reselling where 11 Tauranga properties experienced a loss totalling $1.4 million with the median loss sitting at $52,000.
A gross profit of more than $136 million was made on Tauranga property sales in the first three months of the year.
The median profit for each property sold in Tauranga during the first quarter hit $236,500, and in the Western Bay, the median profit was $225,000 in the same time frame.
Compared to last quarter, these numbers are down slightly where the median profit on a property sale in Tauranga was $244,000, with a total gain of $155.7m for the whole city, but property experts say resellers in the area are still making good gains.
CoreLogic senior research analyst Kelvin Davidson said Tauranga and the Western Bay were seeing strength in the market with high property demand.
“In general anybody selling a property who has held for a normal period of time will be making a capital gain at resale,” Davidson said.
Simon Anderson, chief executive of Realty Group which operated Eves and Bayleys, said there was a ”wow factor” with $236,000 but he was not surprised by the figures because that was the market. Within the difference between people buying and selling their homes could be costs like house renovations and additions.
Tauranga as a market was growing up, he said. It was not only lifestyle and retirees, but people coming here for careers.
Anderson said the market had returned to normal from the peak in 2016 where it had been driven by external influences like Aucklanders moving down with loads of cash from big sales.
And while a lot of people were capitalising on their houses, if they stayed in Tauranga they were buying in the same market. ”Aucklanders were the ones that benefited.”
OneRoof editor Owen Vaughan said the figures reinforced Tauranga’s popularity.
“Well-presented housing stock in good locations will always be in demand, and that’s reflected in some of the sale prices achieved in the region,” he said.
“However, the market is going through a period of consolidation and as we enter a down cycle, vendor are needing to readjust their expectations around price.”
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According to the Real Estate Institute of New Zealand, there were 714 properties sold in Tauranga and 162 in the Western Bay, with Papamoa Beach and Mount Maunganui being the highest selling suburbs.
Tauranga Harcourts general manager Nigel Martin said the first quarter had been relatively steady.
“We have had more activity than expected in the higher priced property sales with good buyer activity over the $1m price bracket.”
Martin said the volume of sales was similar to the first quarter of 2017, however, down when compared to first quarter of 2016.
He said Tauranga gains would be put down to more of the higher priced properties selling than normal in the past quarter and therefore causing the average gains to increase.
“Gains were also affected based on when people purchased their properties. If they purchased prior to 2016, which was the beginning of the boom market, then the actual gains would be higher than those that purchased from 2016 onwards,” Martin said.
“It is a mixture of people renovating homes to create more value in their property but also the market increasing over time.”
The total gross profit in the Western Bay was $33,286,592, and no losses on property sales were recorded in the first quarter.
Rochelle Carter, the owner of Ray White Pukehina, said the first quarter was consistent with the first three months of 2017. However, March made up most of the sales.
Carter said values had stabilised in the general residential middle-tier market.
“Buyers are very particular and have certainly done their homework on prices and what a property has to offer.”
Papamoa life goals
Moving to the Bay of Plenty was a “life-goal” for Melanie Fisher and Cam Saunders.
That goal was ticked off the list when they purchased a home in Papamoa Beach this year, one of the region’s top-selling suburbs.
Fisher, a 27-year-old human resources adviser, said she and Saunders, a 27-year-old vehicle accessory fitter, bought in Golden Sands because they were in love with the beach and found they got better value for their money.
After gaining pre-approval from Saunders’ bank, the couple started looking for properties online and going to open homes. They soon realised they needed to up their pre-approval to buy the home they wanted, which their bank agreed to.
They put in an offer for one of the open homes they visited and purchased a home in Cupples St.
Fisher said the couple paid between $630,000 and $650,000, which was over their original budget, but “ticked the boxes” for what they wanted.