The Bay of Plenty town of Kawerau is New Zealand's hottest property market; house values there have jumped 125 per cent in the past decade. Photo / Mike Scott
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.
House values in the small timber town of 6900 people have leapt 125 per cent in the past decade, delivering more than $100,000 into the pockets of homeowners.
New data by analysts CoreLogic showed the town's average house price jumped from $116,000 a decade ago to $261,000 last month.
Auckland was the next best-performing market. Prices more than doubled since the market bottomed out in March 2009 after the Global Financial Crisis.
That's allowed homeowners to pocket $541,000 in gains as the city's prices across the region soared from $484,000 to $1.025 million.
Nationally, house prices jumped by more $300,000 during the past decade, rising from $373,000 to $688,000.
Carolyn Ion has lived in Kawerau for 50 years and says the burst of activity in the town's housing market is a breath of fresh air.
Retirees from Auckland, Tauranga and Hamilton had been moving into town recently, drawn by the affordable prices, while younger couples were also being enticed by a boost in forestry and dairy jobs.
"Things are really happening. We've got a silver tsunami - I mean that in the nicest possible way - and families and workers moving in," she said.
But while New Zealand property has been on a wild ride during the past decade, the pace of gains is slowing.
The July CoreLogic QV House Price Index showed national house prices rose 2.2 per cent in the past year, while Auckland prices fell 2.6 per cent.
Average prices in Auckland's upmarket areas fell even more. The North Shore was down 4 per cent compared to a year ago.
But the slowdown hasn't hit Kawerau yet. It was the second-best-performing New Zealand market in the past year; prices rose 29 per cent.
Prices had been boosted by a population growing at 1.8 per cent every year since 2014 as well as an increase in forestry jobs, CoreLogic senior property economist Kelvin Davidson said.
Further job boosts were coming from local engineering firm Hutec's expansion and plans to set up a milk processing plant for baby formula, Habitat real estate Kawerau owner John Thomson said.
"Three years ago, many rentals were being rented for under $100 and now very little is available under $250 a week," he said.
But who wants to live in the sleepy town in the middle of nowhere?
Lots of people, given Kawerau was close to the beautiful Taupō and Rotorua lakes system, as well as the beaches at Whakatāne and Tauranga, Harcourts real estate branch owner Lewis Ramsay said.
It wasn't investors, but Auckland, Hamilton and Tauranga retirees making the most inquiries about local properties, he said.
Retirees who might have been battling to pay off mortgages in Auckland were instead buying outright in Kawerau, while keeping cash left over for a motorhome and savings in the bank.
The town also had a new medical centre and was 30 minutes from Whakatāne's new hospital, Ramsay said.
Ion said her parents originally planned to move to Kawerau for two years to work at the Tasman wood mill, but fell in love with the place and spent their whole lives in the town.
But after they died recently, Ion this week put her parents' Kawerau home, purchased in 2003 for $77,000, up for sale for offers above $345,000.
Among other properties on the market in the town is a one-bedroom unit, which is tenanted, priced at just $49,000.
Multiple retiree homes were also advertised for $200,000-$300,000, while a newly renovated 3-bedroom home on an 845sq m block was advertised for $470,000.
Another six-bedroom home priced at $459,000 was advertised as giving investors a 10 per cent rental return.
Elsewhere, in the country, Wellington City prices rose 68 per cent during the past 10 years from $491,000 to $827,000. Hamilton City prices jumped $266,000, and Christchurch prices were up by almost $160,000.
At the other end of the spectrum, the Westland, Buller and Grey districts were the worst-performing markets during the past decade.
Grey District was the only area in New Zealand where prices didn't rise compared to 10 years ago as the house prices remained flat around $220,000.
"Without healthy population and economic growth, property markets don't magically rise just because a decade has elapsed," CoreLogic's Davidson said.
Earthquake-damaged Kaikōura was another of the country's worst-performing markets in the past decade.
But as house prices jumped 21 per cent in the past year to an average price of $451,000, Kaikōura was now one of the top five best-performing markets in the past year and a region to watch, Davidson said.
Highlighting the slowdown in Auckland, the city had now gone from the best-performing market over the past decade to one of the worst-performing markets in the past three years.
Rebecca and Adrian Young are among the young couples moving to Kawerau for its cheap housing and abundance of jobs.
With Adrian working in Kawerau's forestry industry, the couple moved from a rental in nearby Edgecumbe and bought a three-bedroom home in Kawerau in February for $367,000.
The home has a double lounge, sleepout, double garage and a big section filled with fruit trees and a lush garden.
"We love it — the house is beautiful, we've got great neighbours, we have a great community," Rebecca said.
"It is totally unexpected because Kawerau gets a bad rap."
She said the couple considered moving to the town a few years back but were put off by news stories "that made it sound like a terrible place".
However, that perception was fast changing as the town was filled with "amazing people" and was now on the up with new homes being built.
"It also has one of the few remaining railheads in the eastern Bay, which means it's a growth area for industry," Rebecca said.
Retiree Helena Boonen is another recent arrival, selling up her lifestyle block outside of Whakatāne for a smaller Kawerau home.
The main reason she moved was to be near her son after her husband passed away.
But buying in Kawerau also gaver her the chance to pick up a nice house, with cash left over to fund her lifestyle.
The scenic town was also well equipped with shops and her street — Beattie Rd — home to many friendly retirees.
But while Kawerau is now busy with active sports and community groups, it still offers peace and quiet.
"You can hear a pin drop after 9pm," Rebecca said.
• Wai O Taiki Bay - Home values grew 162% from $488,100 10 years ago to $1,280,100 currently
• Point England - Home values grew 160% from $352,800 to $916,050
• Ōtara - Home values grew 144% from $232,000 to $566,850
• Māngere Bridge - Home values grew 144% from $400,900 to $978,800
• Glen Innes - Home values grew 142% from $391,300 to $947,300
• Newmarket - Home values grew 137% from $391,300 to $772,450
• Grey Lynn - Home values grew 135% from $582,700 to $1,368,350
• Forrest Hill - Home values grew 135% from $488,800 to $1,146,300
• Panmure - Home values grew 134% from $348,400 to $816,750
• Māngere East - Home values grew 132% from $282,300 to $655,700
• Ōrere Point - Home values grew 47% from $348,800 10 years ago to $512,950 currently
• Tāwharanui Peninsula - Home values grew 49% from $711,500 to $1,061,250
• Piha - Home values grew 51% from $650,700 to $983,650
• Leigh - Home values grew 55% from $555,400 to $859,800
• Clarks Beach - Home values grew 60% from $506,400 to $808,000
• Waiatarua - Home values grew 61% from $532,200 to $858,200
• Muriwai - Home values grew 64% from $616,900 to $1,011,450
• Oratia - Home values grew 67% from $594,200 to $992,400
• Gulf Harbour - Home values grew 67% from $494,500 to $828,000
• Henderson Valley - Home values grew 68% from $493,300 to $830,950
The S&P/NZX 50 Index closed down 0.10%, falling to 12,627.32.