Bay of Plenty Property Market: A Year of Decline and the Road Ahead
The Bay of Plenty region, a picturesque haven in New Zealand, bore witness to a noticeable dip in its real estate market throughout the past year. The Valocity Value Index, a trusted source for property data, reports a decline in both average residential property values and sales volumes across the region.
Tauranga and Rotorua: A Tale of Two Cities
Tauranga, known for its blue waters and bustling port, saw its average property value drop by 4.2% to $1,090,000 compared to the previous year. This downward shift was accompanied by a 15% decrease in sales. Rotorua, a geo-thermal wonder and cultural hotspot, maintained relatively stable property values at $736,000. However, it experienced a steeper decline in sales volumes, plunging by a staggering 34%.
Western Bay of Plenty and Kawerau: Figures in Decline
The Western Bay of Plenty, a place of natural beauty, wasn’t immune to the market downturn. It reported a 3.5% decrease in property values. Kawerau, a district rich in Maori history, faced the most significant decline with a drop of about 12% in its property values.
The Underlying Causes
The downturn in the Bay of Plenty real estate market can be attributed to high interest rates and the uncertainty surrounding the 2023 general election. These factors significantly impacted investors, resulting in their retreat from the market and a subsequent decrease in transaction volumes.
The Outlook for 2024
Despite the rather bleak picture painted by these figures, real estate professionals predict a gradual improvement in 2024. They anticipate first-home buyers and those looking to trade up to become the primary market drivers. High-value sales have started to emerge, with two properties fetching over $7 million each. Real estate experts agree that while 2023 posed challenges due to rising interest rates and tightened budgets, the post-election phase has seen a slight upturn in market activity.
Signs of potential relief for the housing market have already started to surface. Banks like ANZ have recently lowered their mortgage rates, while ASB economists predict an Official Cash Rate (OCR) cut in August 2024. The real estate sector expresses cautious optimism for 2024, expecting stable prices and increased activity, though not a boom.