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Bayleys Research


ROTORUA RESIDENTIAL REPORT 2008

APRIL 2008

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OVERVIEW

Voted as New Zealand’s most beautiful city in 1999, 2000, 2002 and 2006, and supported by a Council looking to provide sustainable community services that improve the quality of life for residents, Rotorua is proving to be a popular place to live.

As a result, Rotorua’s residential market has performed strongly over the last few years, with the latest December 2007 quarter median sale price at $257,000, according to the latest figures released by the Real Estate Institute of New Zealand (REINZ). This represents impressive growth of approximately 84% since the December 2002 quarter median sale price of $140,000.

 

 

The latest results however, indicate that the significant levels of price growth achieved over the last few years have now converged in line with the rest of New Zealand. The December 2007 quarter median sale price increased by 6% compared to the same period last year but recorded a correction of-2% from the September 2007 quarter, possibly providing an early insight into the 2008 market conditions with values flattening out and possibly dropping by a modest amount in some areas.

 

 

While the median sale price indications for Rotorua for the beginning of 2008 show further value growth, with the actual sales reported to REINZ for January 2008 recording a median sale price of $281,000, this is based only on one month’s data and not indicative of the trend for 2008. However, anecdotal evidence from the market so far this year suggests that a number of vendors are dropping their asking prices in order to achieve a sale.

 

 

While sales volumes for Rotorua have made a slight come back in the latest December 2007 quarter, the 385 sales recorded is still well under the record 584 recorded in the March 2005 quarter. This reduced number of sales is typical of residential dwelling sales volume for New Zealand as well, which have also weakened in recent months.

In tandem with the slow down in sales has been the extended time it now takes to sell a dwelling. However, while the average days on market figure of 60 is more than the time it took a property to sell during the heightened level of market activity during 2004 and 2005, the average days on market is still below that recorded during 2002.

 

 

As illustrated by the graph on previous page, showing the distribution of sales by $100,000 price brackets, residential property in Rotorua has shifted upwards in price over the last seven years.

Closer analysis of sales trends at the top end of the market shows that in 2000 there were four sales recorded above half a million dollars, but in 2007 there were 117 sales. This represents 7% of the total sales for Rotorua.

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