The Tauranga, Mount Maunganui and Papamoa residential market is experiencing a buoyant period over the early part of 2011, during which time volumes have spiked during March. This follows a very subdued market from 2009 and throughout 2010. Mainstream media continues to distort and mislead the public in relation to the soundness of the residential property market, with repeated diatribe about rising average sale prices. Anyone who can walk and talk will know that statistics, especially averages, can tell you anything you want..
The apartment market continues to be over supplied with a continued supply of new units coming onto an already stressed market with evidence showing sale prices achieved are at around 40%-50% of the original asking/sale prices of the 2003/2006 boom time.
Recent cuts in the official cash rate by the Reserve Bank has effectively provided the average mortgagor with a breathing space, however rising livings costs, especially fuel and food are impacting on the average household budget. Rising (actual) inflation as opposed to official inflation reported by Government, coupled with international geopolitical forces will, we believe, have a significant impact on property prices across all sectors of the market and New Zealand will be no exception. Whether the affect is positive or negative, remains to be seen.
After the boom of 2003-2005 fuelled by easy credit and an unprecedented era of LIAR loans and an unofficial Property Ponzi scheme, house prices have fallen. Capital gain/growth seems unlikely as wages and purchasing power continues to be eroded by the rising cost of living. However, 2011 has seen an increase in buyer activity and at the time of writing, agencies are reporting a shortage of listings. Some pundits are picking this as a turning point in the market, however time will tell.