Lower-priced properties in Tauranga are being snapped up as high rents make them an attractive investment for landlords.
L J Hooker Pyes Pa branch manager Craig Wilson said over the past six months rising rent prices had attracted property investors back into the market.
"It's not that difficult to get percentage returns of 7-8 per cent. Previously it was closer to 5-6 per cent," he said.
As a result there had been "good inquiry" on houses at the lower end of the market.
"There are more folk looking at investments as an alternative to bank investments, with rental prices booming a little bit," he said.
"Someone else pays your mortgage, effectively."
Simon Marton, managing director of Harcourts Advantage Realty Bay of Plenty, said a more stable global economy had given first-home buyers and investors confidence to buy.
"We are noticing that there is a bit more activity on cheaper housing. First-home buyers and investors who have not been in the market for the past four years ... are now in the market and looking," he said.
In terms of investment, cheaper properties tended to get a better return, he said.
Greg Purcell, of Ray White Mount Maunganui and Papamoa, agreed "yield has got a lot better".
"It's one of the positives to pull out of a recession. Property prices come down and interest rates come down," he said.
However, while lower-priced properties could pay for themselves as investments, they were less likely to increase in value over time. "Often it will never be any more than it is," he said.
"The more you can get into the upper realms of $250,000 to $300,000, when the market comes away the growth will be more substantial."
Ross Stanway, chief executive of Realty Services, which operates Bayleys and Eves, said investors were groups of people attracted to properties with low price tags. "Everything sells at a price. There are always people who are very restricted in their budget, therefore they have to purchase property in that price range if they are going to live in the property," he said.
There were also the "do-uppers" - people who had the skills and the time to renovate and onsell for a profit.
"When you have these groups of buyers there's always interest and activity at that end of the market," he said.
According to realestate.co.nz, the 10 cheapest residential properties (with listed prices and not including properties in residential care settings) were priced from $169,000 to $205,000.
The lowest-priced was a newly refurbished, one-bedroom home in Landview Rd, Parkvale, advertised as being able to attract $250 a week in rent, or $13,000 a year, with an approximate 7 per cent return.
The second cheapest, at $172,000, was a two-bedroom unit in Ngatai Rd, Otumoetai, with a private deck and fully fenced courtyard.
Of the 10 least-expensive homes in Tauranga, four were one-bedroom, three were two-bedroom and three were three-bedroom. Two were at Mount Maunganui, three at Otumoetai and the remaining four at Parkvale, Gate Pa and Greerton.