Bay optimism highest in country

Neil Trebilco, president of NZ Kiwifruit Growers, says the turnaround of the industry from the low point of the 2013 harvest had been amazing. Photo / File

The amazing turnaround of the kiwifruit industry has played a big part in the Bay of Plenty being named the most positive region in New Zealand.

Westpac Bank's quarterly economic roundup said it was not hard to see why nearly 25 per cent of Bay people were optimistic about the economy.

"The kiwifruit industry has recovered well from the Psa outbreak and the region is not as exposed to dairy and its uncertainties as neighbouring Waikato," economist David Norman said.

Westpac also highlighted the impact of the tightening of mortgage lending restrictions in Auckland and Auckland's increasingly unattainable goal of home ownership.

"It seems to be driving people to Tauranga and Hamilton, pushing up house prices in both regions," he said.

The spin-off for the property market was that the average asking price listed on Trade Me for a typical Bay house had risen $105,000 in three years - up from $378,000.

Trade Me Property spokesman Nigel Jeffries said the "Auckland effect" had driven up prices so much in the Bay that it was now the second most expensive region to buy a house.

Asking prices had climbed $4000 a month over the past year.

"Last month alone we saw selling price expectations for a typical property up by $11,400 since last month, breaking records and landing at a new high of $483,000."

New Zealand Kiwifruit Growers Inc president Neil Trebilco said the turnaround of the industry from the low point of the 2013 harvest had been amazing.

"Growers are in a much better space. They are talking about investing in a whole range of things."

Investments included converting pasture into orchards, redeveloping old orchards and new structures and covers to protect vines.

Mr Trebilco said the impact of kiwifruit on the Bay was huge, with a 2004 University of Waikato study concluding the crop accounted for 20 per cent of the Bay's GDP. Last season's bumper crop of 120 million trays was forecasted to reach up to 130 million trays this year, driven by Gold3 plantings coming on stream.

He contrasted this with the 2013 low point when the harvest dropped to 85 million trays: "It's an amazing story."

Economic development agency Priority One said Tauranga was witnessing strong inward migration from Auckland and Wellington. "It is not just the retired demographic. There are a lot of young professionals arriving and people bringing their businesses here," chief executive Andrew Coker said.

He said inward migration was boosting the construction sector, with a strong corresponding growth in professional services. "By any measure economically, we are doing very well."

Building consents were at record levels and people were generally very positive. "We are very fortunate to be in this position, and it's sustainable."

Tauranga's deputy mayor Kelvin Clout said Tauranga's advantages included having an amazing lifestyle, good physical environment and planning to accommodate growth. "We have been very proactive in opening up residential land. The council has not been afraid to invest in the future."

Mr Clout said there was definitely a positive vibe happening.

Westpac's report showed that sales of electronic goods had surged in the laster quarter, with house sales in the Bay and Waikato now almost double the five-year quarterly average.

The fast-growing aged care sector had 13,600 people employed in healthcare and social services.

However, the lacklustre forestry outlook meant that eastern and southern areas of the Bay would continue to face employment challenges, the report said.

Bay of Plenty's performance for Sept-Nov quarter

* Regional economic confidence: 24.8% (26%)

* Regional employment confidence: 96.6%

* Unemployment rate: 6.6% (7.7%)

* Passenger vehicle regos: 3164 (2827)

* Commercial vehicle regos: 769 (667)

(Previous quarter in brackets)