Nearly every first-home buyer in the Super City says it is impossible to buy a home in Auckland. And now it seems Tauranga is also too expensive. So plenty of first-home buyers and investors are looking elsewhere to get a foot on the property ladder.

That "elsewhere" is often larger towns and cities such as Rotorua, with its enviable lifestyle and Napier with its weather.

Go smaller and house prices start to drop significantly. The median house price for Taupo, Rotorua, Hastings, and New Plymouth districts and Napier City, according to QV, were all in the $400,000s at January 2018.

Shrink your expectations further and look at the Otorohanga, South Waikato, Waitomo, Gisborne, Stratford, and Whanganui districts and you can expect to pick up the median home in the $200,000s.


If you're not wedded to buying or living in a certain area, bargain-basement median homes can be picked up for less than $200,000 in even smaller locations such as Kawerau, Wairoa, Rangitikei, and Tararua district.

Like many small towns, Taihape is attracting new residents from the big cities. Property Brokers branch manager Denis Robertson knows four Auckland couples and one from Waiheke who have moved to the town in recent times.

Some, he says, are older people moving down to enjoy the "small, busy environment".

The town is also attracting younger people who are doing everything from working in cafes, schools and even setting up holiday accommodation businesses at home.

Taihape isn't just a pit stop on State Highway 1. It has a number of cafes, an independent cinema and a modern school.

"You can buy a lovely home for $150,000 to $200,000," says Robertson. Or for something posher you could expect to pay in the $300,000s.

Investors can find homes as well. At the time of writing Property Brokers was selling a former villa split into two, two-bedroom tenancies for $130,000. The units were returning $310 a week between them.

There is a real shortage of rental property in the town, says Robertson, who has seven tenants on his books looking for rental property.

In Tokoroa, a four-bedroom, two-bathroom Lockwood home, fronting on to Lake Moananui, was on the market for $330,000 in mid-February.

Potential investors who think they won't then find tenants are mistaken, says Fiona Dickson, manager at RentAssured Tokoroa.

"We are really short of landlords. A three-bedroom house can fetch between $200 and $300 depending on the size, location and presentation," says Dickson. "A four-bedroom home can get $250 to $400 with the top-end executive-style house."

Big city landlords sometimes fear buying in really small towns.

"The best thing they can do is call us before they buy, to ensure they don't buy in a lemon area," says Dickson. For example, flats still have good demand but there are some streets over populated with flats, which are not that popular, she says. Like Tokoroa's RentAssured, most small towns have rental agencies to manage the property.

Although the main street of Putaruru doesn't have the charm of other nearby towns such as Cambridge and Te Awamutu, it is looking up with a flash new cheese shop/cafe called Over The Moon.

Good homes go for small change compared to desirable parts of Auckland.

Remax agent Cary Ralph recently sold a renovated 1950s brick home in Terrace St for $380,000. The property included 2100sq m of land.

For those who want to go all out there are expensive properties in every town. The difference is that in the small towns you get a lot for your money. In Tirau buyers can quite literally pick up a castle for $1.25 million. It's the Tirau Toy Museum with 3 bedrooms, 1 bathroom and a 700sq m castle.

For those looking to relocate, there is work in small towns. Some people can work from home. Others can commute to a larger community and in many cases there are well paying jobs at mills, dairy factories, and more.

A quick search of job advertisements for some of these areas bring up a range of local work opportunities in the South Waikato such as a financial accountancy job in Tokoroa offering $84,999 and jobs in corrections, education, medicine, local government, engineering, architecture, trades, retail, tourism, IT and more.

Ralph sold a Putaruru property to one Auckland couple where the husband continues to commute daily to Auckland. Plenty of others commute to Tauranga, Cambridge, Rotorua and Hamilton for work, he says.

Rental yields are of importance to investors. That's the gross return on their investment expressed as a percentage of purchase price that they can expect to earn from rent.

In the Rangitikei district, the latest gross yield figure cited by QV is a 6.6 per cent return on investment. For South Waikato that figure is 6.8 per cent, Tararua, 6.9 per cent.

That compares with Auckland where rental yields range from 1.2 per cent in Central East to 3.8 per cent in Otahuhu.