The Tauranga, Mount Maunganui and Papamoa residential market is experiencing a flat period after a very buoyant market over the latter part of 2009, during which time both volumes and values stabilised after the 2008/early 2009 drop in both. Early 2010 has seen a return of seller interest with buyers having gone back into hibernation.
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% under original asking/sale prices of 2005/2006 during the boom time. Drastic cuts in the official cash rate by the Reserve Bank over late 2008/early 2009 has effectively provided the average mortgagor with a breathing space, however while the economic crises has been dispelled by the mainstream media, rising sovereign debt levels worldwide, coupled with 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. Increased levels of unemployment with the prospect of rising mortgage interest rates will also impact significantly should they eventuate.
After the boom of 2004-2006 fuelled by easy credit and an unprecedented era of LIAR loans and an unofficial Property Ponzi scheme, house prices have levelled, however with the current 6-7 value times the average income, capital gain/growth seems unlikely as wages and purchasing power continues to be eroded by the rising cost of living. Short of a massive flood of immigrants and/or cheap money, we foresee a subdued market continuing for the foreseeable future.