The availability of land for new homes to be built has been attributed as one reason Tauranga has been identified as one of the country's most valuable cities for residential real estate.

A new report says Tauranga's combined value of the city's housing stock has grown 63 per cent over the past three years, reaching $34.4 billion.

According to the report from the Property Institute of New Zealand and property data company Valocity, Tauranga's growth was the steepest of any of New Zealand's six main centres between 2015 and 2018, becoming the city with the fourth-most valuable housing stock - twice as valuable as Dunedin ($17b) and 20 per cent more valuable than Hamilton ($28b).

Local property and economic experts have pointed to the exodus of Aucklanders to Tauranga, the residential building boom and the city's increasing desirability as key drivers of the $13b value rise.

Advertisement

The city's 2018 year-on-year growth of 5 per cent was, however, well below 2017's 26 per cent and 2016's 21 per cent leaps.

Nationwide, the value of residential property rose 5 per cent year-on-year to over $941,000b.

Nigel Tutt, chief executive of economic development agency Priority One, said Tauranga had been able to free up more land for building than other centres.

Some 5564 land titles were released in Tauranga between 2013 and 2017 - five times as many as released in Wellington and close to double Hamilton's, according to data the agency compiled.

"As a city, we have been good at increasing supply, but even so demand is still outstripping supply," Tutt said.

Harcourts Tauranga chief executive Simon Martin said the higher proportion of new homes in Tauranga would lift the city's overall value.

The city's position on the harbour and seaside could also factor in.

"We have a lot of properties with views of the waterfront."

Realty Group chief executive Simon Anderson said there had been strong interest in Tauranga from Aucklanders over the past three years.

"They saw good value here and that, in turn, lifted our values."

Mayor Greg Brownless did not think a reverse in that trend of rising values - "a market correction" - would be a bad thing for the city.

He acknowledged Tauranga's desirability and rapid growth was creating issues of both affordability and infrastructure stress.

All commentators said Tauranga was increasingly recognised as an attractive place to live with a good climate and a growing economy, buoyed by the city's position in the Golden Triangle with Auckland and Hamilton.

"We used to be known as $10 Tauranga," Anderson said. "We're well past that now."


Value growth in main centres 2015-2018

- Tauranga: $21b up to $34b
- Auckland: $344b up to $469b
- Wellington: $60b up to $88b
- Christchurch: $60b up to $67b
- Hamilton: $18b up to $28b
- Dunedin: $12b up to $17b.

Source: Property Institute and Valocity

Bethlehem: the "Remuera of Tauranga"

The new report named Bethlehem as Tauranga's most valuable suburb in 2018 with a median property value of $771,000.

Talk to residents about the suburb's attractions and you will hear the same things repeated - it is green with good shopping and public amenities, plus it offers multiple routes into the city.

Eight minutes to the CBD, to be exact, according to Bethlehem resident of 12 months, business leader Dryden Spring.

"The location is very good. It's also close to Auckland and Waikato - you don't need to go through the centre of town unless you're going east," he said.

Real estate in the suburb was not what Spring would call "a bargain", but there were a lot of positive amenities that justified the higher prices.

"You get what you pay for."

Realty Group chief executive Simon Anderson said Bethlehem was a suburb on the rural fringe, meaning it had some larger blocks of land that had "sold outstandingly well".

It had also expanded over the last three years, with the introduction of a couple of new subdivisions.

Bethlehem-based Bayleys real estate agent Jan Hodges said the leafy suburb had a "lovely community feel" as well as great positioning, especially in relation to Bethlehem College - "a drawcard" - and the CBD.

"I've always referred to it as the 'Remuera of Tauranga'," Hodges said.


Suburb superlatives

- Most valuable: Bethlehem ($771,000)
- Runner-up: Mount Maunganui ($728,000)

- Most reasonably priced: Gate Pa ($445,000)
- Runner-up: Parkvale ($443,000)

- Biggest value movement: Matapihi (up 68 per cent)
- Runner-up: Parkvale (58 per cent)

- Smallest value movement: Tauranga South (up 49 per cent)
- Runner-up: Papamoa Beach (48 per cent)

Source: Property Institute and Valocity