House values in Kawerau have risen almost 50 per cent in the past year with the town's mayor and real estate agents saying there are many reasons people are buying up large.

According to the latest Quotable Value (QV) national figures for the year ending October 30, house values in the mill town have risen 49.3 per cent - the biggest increase in the country. Rotorua values rose 25.9 per cent over the same period, placing it sixth in the country.

QV national spokeswoman Andrea Rush said although Kawerau experienced the largest increase in the country, "they are coming off a very low base".

"The area still has one of the lowest average values of anywhere in the North Island at $151,957 and values there are still 4.6 per cent below the previous peak of 2007."


Mayor Malcolm Campbell said Kawerau had a lot going for it - good schools, a great climate, central location and access to airports - and the town was not immune to the current housing boom being felt in many parts of the country.

He said people were going to the town to retire, buy their first home or commute to work in nearby Rotorua, Whakatane or Tauranga.

"It's all very positive stuff, but they [house prices] had to go up at some stage, we could go up another 40 per cent and we'd still be affordable."

Mr Campbell said a lot of people from out of town were buying properties, "and not just for rentals, and that's had a big bearing on the house prices".

He said he expected prices to continue to climb.

"People are hitting on the fact they can buy here cheaper and get a lot more value - $450,000 would buy you a very substantial home here."

He said, as in Rotorua, there was now a shortage of rental properties.

"We most definitely are getting people coming here to retire and that's a good sign.

"They have a lot of enthusiasm, are joining clubs and doing volunteer work."

He said younger people were also moving to Kawerau to get a foot on the property ladder and the combination was good for the local economy.

"There's a bit of a rush on because they don't want to miss out with houses selling in days or weeks," he said.

Harcourts Whakatane branch manager Chris Timmins said the Kawerau real estate market had been undervalued for many years and in the past 18 months had seen unprecedented interest with values steadily increasing.

"Kawerau was purpose-planned and developed in the 1950s with all amenities available to the residents who enjoy living there, being only 30 minutes to Whakatane, 40 minutes to Rotorua and less than one hour to Mount Maunganui and Tauranga.

"The sunshine hours are some of the highest in the country and for outdoors people the forest and lakes are at your doorstep."

He said Harcourts had just listed a modern 300m2, five-bedroom, two-bathroom home at the higher end of the scale for $450,000, that was only 10 years old.

At the other end of the scale "you can buy a solid 1950s three-bedroom home, rewired 12 months ago, with an excellent tenant paying $210 per week and who is keen to stay on" for $129,000.

"Harcourts' clients who have purchased in Kawerau over the last 19 months have been split 50 per cent owner occupiers, of which 50 per cent are young families.

"The other 50 per cent are owner occupiers, of which 50 per cent are retirees and 50 per cent young families.

"The other buyers have been investors where rental demand is strong."

Habitat Realty sales agent Linzee West-Hayward said in the past two years Kawerau had seen a huge shift to the positive.

"Even in terms of business, where there were so many closed doors in town.

"It's now becoming a lot more vibrant with new shops opening up on the main street."

She said she was getting a lot more interest from workers from Rotorua and Tauranga because prices were low and it was an easy commute.

"They can buy freehold and have money in the bank. I've sold to people from Christchurch, Palmerston North and all over the North Island.

"There are also people who moved overseas and are now coming home, but the big push is from retirees and 50-plus buyers.

"Kawerau's great value, has good services, lots of great events, we have an amazing council, free hot pools and everything's in walking distance," she said.

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said he had heard the town was attracting renewed interest, especially from retirees from elsewhere in the Bay of Plenty and Auckland.

"This could lead to a new and very positive phase in Kawerau and for the Kawerau community in general."

- Is one of the youngest towns in New Zealand, founded in 1953 as a mill town for the Tasman pulp and paper mill (now Norske Skog).
- Has a population of about 6800. Its population peaked in 1981 at 8600.
- Is the smallest territorial authority in New Zealand in terms of land area (21.9km2) and is completely surrounded by the Whakatane District.
- Famous locals include BMX star Sarah Walker, singer/entertainer John Rowles, fashion model Danielle Hayes and Miss New Zealand 2010 Ria van Dyke.