'Traditional' areas fare better

Houses bought in established areas such as Pillans Point, Matua and the early Avenues during the property boom have weathered the housing slump best.
And Bethlehem is another star performer in a list of Tauranga and the Western Bay's most buoyant suburbs, where house values have performed best since the high point of the last boom in 2007.
Although even the best performing areas were well below their peak, Te Puke retained its value the best - although that could be because the area had less distance to fall.
Bethlehem and Papamoa have also been identified as top performers in a list compiled by Jono Ingerson, research director for qv.co.nz.
Recent sale prices were used to calculate the average percentage change in value by suburb during the past three years.
Shayne Donovan-Grammer, a valuer in QV's Tauranga office, said some areas of Tauranga and the Western Bay had performed better than others during the housing slump.
"In a market like this when people are looking more for security, they are going back to the tried-and-true solutions," he said.
"The more established areas didn't get the boom as much, but they haven't taken the hit as much either.
"In Tauranga, there's a real consolidation of areas like Bethlehem, Pillans Point, Matua and early Avenues."
Real estate agents agree that "traditional" suburbs have fared well, with Te Puna and Pyes Pa also nominated as stars.
And the attraction is clear - good schools, central locations and a harbour position are all drawcards.
As in Auckland, school zones are becoming increasingly influential in the property market in Tauranga.
"That's going to become of more and more value over time, as it has done in bigger centres," Mr Donovan-Grammer said.
Proximity to well-regarded and high-decile schools such as Pillans Point School, Matua School and Bethlehem College boosted values.
"Pillans Point has been zoned for quite awhile and there's been a premium paid for property or renting to be in that area.
"The premium is still in its infancy compared to Auckland.
"In Auckland, it's hundreds of thousands, [while] it would be barely $10,000 or $20,000 here."
Mr Donovan-Grammer said mid-priced homes ($400,000) in suburbs such as Matua were boosted by their proximity to million-dollar mansions.
"It's better to be surrounded by $1 million homes when you have a $400,000 home than it is to be surrounded by $400,000 homes if you have a $1 million home.
"You are getting a kick-back from the upper properties.
"People who have got a million-dollar property are more likely to improve their property and spend half-a-million dollars on it, which raises the standard of their location - you get indirect benefit from that."
In contrast, a $400,000 home bought in a new subdivision had not held its value because there was no "scarcity factor".
"It's easy to duplicate them. There's a huge over-supply of sections in the market and there are similar homes already there.
" What's differentiating you from the guy next door trying to sell his home?"
While Te Puke came out on top in the QV research, Mr Donovan-Grammer said it was a "stable area".
"It didn't get carried away in the boom - it didn't have a big fall, because it didn't have a big rise."
He was surprised to see Papamoa coming out well and believed it had held up comparatively well because it declined earlier than other parts of Tauranga.
"Papamoa has been more subdued and slightly less active for about a year longer than Tauranga has, it's been quiet for longer.
"It did its readjustment early. It's been static for the last year or two. It came back more in '08 than everywhere else."
Hot picks for the future? Mr Donovan-Grammer believes suburbs close to the city such as Judea, Brookfield and Bellevue will gain in value.
"There's only so many houses that can be built on a peninsula like Matua and, over time, that will become more and more scarce.
"That's why I believe lesser value suburbs in Tauranga will, over time, do quite well."
Other benefits of those suburbs include a high level of amenities.
Owners worst affected by the housing slump have been determined by the type of property rather than suburbs.
Apartments had been "the worst by far", due to an artificial demand during the boom, Mr Donovan-Grammer said.
The next worst hit category is sections, because of an abundance on the market and no return for investors.
Entry-level properties had also been hit hard due to "investors getting carried away".
"[Investors] paid $250,000 for something that was only ever worth $180,000," Mr Donovan-Grammer said.
Entry-level properties in suburbs such as Greerton, Gate Pa, Welcome Bay, Windermere and Poike had been affected.
Coastal areas with low amenities had also been slammed. Pukehina Beach was an example, he said.