Kawerau tops housing market

Best capital gains may be in smaller towns not cities

Humble Kawerau sitting close to thermal springs and the tourist delights of Rotorua and the Bay of Plenty has emerged as New Zealand’s best-performing property market.

Home values in the small town of 6800 people jumped more than 25 per cent over the past year to a median price of $230,500, CoreLogic reports.

This was highest jump in the country ahead of Wairarapa town Featherston and Invercargill suburb Clifton, where home values both rose more than 20 per cent.

Parau and neighbouring Laingholm in Auckland’s rural southwest were the two worst-performing markets with home values falling more than 5 per cent.

The wider Auckland and Christchurch regions were home to all 10 of the country’s worst-performing markets.

Long-time Kawerau mayor Malcolm Campbell said the burst of activity in the town’s housing market was a breath of fresh air.

Retirees from Auckland and Tauranga had been moving into town recently, drawn by the affordable prices, while tourism was growing and two major wood mill expansions were expected.

“Those newbies coming into town that is where the real positive stuff is happening, and there is quite a big expansion forecast for the next 12 months to two years also,” he said.

“We are possibly looking at 1000 new jobs in the area.”

Kawerau’s growth indicates the best finds for buyers chasing capital gains may now be in the country’s smaller towns rather than cities as markets like Auckland and Christchurch stagnate.

“Affordability is clearly a problem across Auckland,” CoreLogic research analyst Kelvin Davidson said.

This was likely to have affected the higher-priced suburbs of Schnapper Rock and Flat Bush, which both featured among the list of the country’s 10 worst-performing markets, he said.

Home values in Schnapper Rock fell 4.4 per cent from $1,423,326 one year ago to $1,360,700 currently, while Flat Bush values dropped 3.1 per cent from $1,070,330 to $1,037,150.

By contrast, Porirua and the Wairarapa in the lower North Island were home to six of the 10 best-performing markets, including Waitangirua, Cannons Creek, Ranui, Featherston, Greytown and Martinborough.

Each of the six towns recorded an at least 18 per cent growth in home values, partly due to increasing numbers of first-home buyers being pushed out of Wellington, Davidson said.

“Anecdotally, Greytown has also become a trendy place to live, with out-of-towner property demand significantly increased,” he said.

OneRoof editor Owen Vaughan said figures from the last six months clearly showed the market was entering a new phase.

“The market as a whole is in a lull and is past its peak. Affordability has become an issue in the main centres, forcing buyers further afield,” he said.

“Satellite townships that offer value and an easy commute time are natural places for buyers to look and the latest CoreLogic figures bear that out.”

In Kawerau, Featherston, Greytown and Martinborough, 10 per cent of each town’s housing stock had changed hands over the past year.