House prices are still on the increase in the Bay of Plenty, although there is a record number of properties listed for sale in the region.

The average asking price in the region during May was $985,100 – up 19 per cent year-on-year and up one per cent when compared with the month prior, according to the latest Trade Me Property Price Index.

This bucks the national trend, says Trade Me Property sales director Gavin Lloyd.

'In May, the average asking price for a property in New Zealand was $949,700.

'When compared with the month prior this marks a drop of two per cent – the largest month-on-month drop we have ever seen.”

The most expensive district in the Bay of Plenty region last month was Tauranga, where the average asking price was $1,089,300

The all-time high average asking price in the Bay of Plenty region was seen in February, when it reached $1,001,550

The region had 76 per cent more properties for sale in May when compared with the same month last year, and Gavin says this high supply of properties is likely to have an impact on price.

Trade Me Property Sales Director Gavin Lloyd. Supplied/Stuff.

'Having more options than ever before is really taking the pressure off buyers and eliminating that fear of missing out that was behind much of the price growth over the past couple of years.

'As a result, the market has seen a remarkable shift, putting buyers well and truly in the driver's seat.”

The Bay of Plenty's figures buck the national trend when compared to the majority of the country, with the latest data and insights from the Real Estate Institute of New Zealand (REINZ) suggesting tighter credit conditions, higher mortgage rates and increased housing supply continue to affect the market nationally.

Data released this week reveals sales are slower to complete, while property is staying on the market longer and upward pressure on prices is easing.

'Looking at New Zealand as a whole, median prices increased 2.4 per cent annually to $840,000 in May 2022,” says REINZ chief executive Jen Baird.

REINZ chief executive Jen Baird. Supplied/Stuff.

'Month-on-month, there was a four per cent decrease in median price. Moving from April to May, we tend to see a marginal dip in median property prices. This month, the seasonally adjusted figures show a decrease of 3.1 per cent, indicating a greater drop than expected as we moved from April to May.”

Jason Eves, partner at Oliver Road Estate Agents in the Bay of Plenty, says the current market is 'full of negative sentiment”, and believes 'sensible buyers” are taking advantage of higher inventories and slower sales.

'Sales below values previously paid for homes are reported to represent less than one per cent of the national sales results and mortgagee sales are not a feature of the selling scape,” says Jason.

'After an initial period of transition from the booming FOMO market of the last two years, we are finding sellers have a clear understanding that their property is unlikely to sell in a competitive scramble for more than it was objectively worth.

'As such they are comfortable offering their homes up for sale at prices that we would expect reflects fair value to those wanting to own them.

David Martin, chief operating officer of Realty Services which operates Bayleys and Eves, sees tighter lending criteria as a 'hindrance” to the majority of buyers.

'In the big scheme of things, interest rates are still relativity low,” says David, 'however tighter lending criteria is a hindrance to most buyers as banks factor in the potential for high lending rates over the course of the year.

'This means sellers should take first offers from buyers very seriously going forward. It also means that while auction clearance rates appear to have softened, we are still seeing strong sales volumes post-auction, as uncleared property relaunch with the benefit of pre-auction feedback.”

Jason says Oliver Road Estate Agents have seen several sales in the last few weeks, with most moving at their listed price and two as 'sight unseen” to returning ex-pats from the UK and Canada.

'We are now recognising that buyers who are buying homes for themselves and their families, as opposed to seeking profitable distressed opportunities, have also made the transition to moving on with their plans to relocate or upgrade,” he says.

'Many buyers are now mindful that any further decrease in market values that may occur before the bottom of the market in this cycle is reached, are practically and financially outweighed by the opportunity to properly consider and secure the home they want to live in for the foreseeable future.”

-Stuff/Annemarie Quill and Dan Sheridan.