Report shows district outstripping national growth in almost all areas

Rotorua's economy is moving forward in leaps and bounds, according to a new report, with the city outstripping the country's average growth in 10 of 11 economic indicators.

The Infometrics quarterly economic monitor for the Rotorua district to the end of March sees Rotorua's gross domestic product at 2.9 per cent, compared with 2.3 for New Zealand.

Rotorua's unemployment rate has fallen to its lowest level since 2009, sitting at 7.2 per cent, but is still higher than the national average of 5.7 per cent.

According to the report, house prices in Rotorua continue to climb rapidly, building consents were beginning to climb from a low base, and further growth was anticipated over the coming quarters.


"Rotorua's tourism sector enjoyed a golden summer, with guest nights in commercial accommodation rising 7.1 per cent over the year to March.

"We expect the tourism sector to enjoy a roaring trade throughout the winter months. But we caution that, later in the year, capacity pressures at peak times may push up prices for visitor attractions and accommodation," it stated.

Rotorua Lakes Council economic growth portfolio leader and deputy mayor Dave Donaldson said everything was looking positive for the district's economy.

"Especially with respect to the tourism sector, it reaffirms everything we were told at Trenz by all the key chief executives.

"Since these figures ended in March, we have seen the shoulder season thriving and are looking forward to better trade in the winter months," Dave Donaldson says.

He said he was hearing from investors looking to invest in Rotorua's tourism and hospitality sectors: "Rotorua is popping up on their radar."

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Deputy mayor Dave Donaldson said Rotorua was popping up on investors radars.
Deputy mayor Dave Donaldson said Rotorua was popping up on investors radars.

"As part of our work to better prepare for this growth, we are in the process of forming the new economic growth council-controlled organisation with three focus areas: business growth, investment attraction and tourism growth.

"A lot of that is already under way, so the other challenge we face is ensuring we have the infrastructure to underpin that growth ... but these are all good problems to have."

He said with regard to the unemployment figures, he was not too concerned as tourism and hospitality businesses were looking to hire many more staff in the coming months in preparation for what was hopefully going to be another record-breaking year for the sector.

Skyline Rotorua general manager Bruce Thomasen said he thought the tourism industry would be contributing to this increase in employment, as it was going through a big growth phase, increasing demand for staff across the board.

Mr Thomasen said there were more positions at his company this winter than last winter.

"The future growth of the industry is looking very strong."

He said, as well as direct employment, the company used its suppliers a lot more, such as contractors, electrical suppliers, food suppliers and services.

Both direct and indirect services were being influenced by the area's tourism growth, he said.

There's been a dramatic increase seen in residential and non-residential building consents.
There's been a dramatic increase seen in residential and non-residential building consents.

Building contractors and suppliers were also being utilised by the tourism industry, as companies were investing and renovating, Mr Thomasen said.

A dramatic increase was seen in residential and non-residential building consents - climbing 36 and 69 per cent respectively, and with house prices and house sales rising 16 per cent and 72 per cent respectively.

Real Estate Institute Industry of New Zealand (Reinz) spokeswoman for Rotorua Ann Crossley said it was a great time to be a real estate agent. "You can feel the hum everywhere you go, it's just lovely.

"To put it into context, in 2013 we were back at 2005 levels. But this huge leap for us is a percentage of correction with the really big driving factor being the bulge of the baby boomers coming out of Auckland who want to retire and are coming to Rotorua."

But, Mrs Crossley said, Rotorua did not have enough new housing stock with development of new sections lagging behind demand.

"This desperately needs to change. Even if we could solve our section issues now it's going to be two years before it comes online." Council consent solutions manager Paul Spurdle said there was increasing interest in subdivision and residential development coming from consultants.

"There is an increased number of subdivision consents being processed, as well as applications to release certificates of title.

"The new District Plan has maintained, and rezoned, quite a lot of land for residential and higher density rural lifestyle-type development."

He said subdivision was a market and owner-led process. "Therefore the timing, type and scale of subdivision is controlled by landowners. Although there is a lot of land zoned for residential development, for new subdivisions a lot of this available land sits in large blocks and is therefore controlled by a small number of land owners."

Rotorua Chamber of Commerce chief executive Darrin Walsh said the results, to quote boxer David Tua, were "simply 'O' for awesome".

"To be ahead of national averages in all these measures really highlights the growth we are seeing here in Rotorua. Businesses are doing well and are growing - creating jobs and employing locals - hence the decrease in unemployment.

"We are also seeing a skilled workforce coming in from outside of Rotorua and our population is increasing - houses are selling and homes being built.

"Rotorua is proving it is a great place to live, work and play, but sustaining it is the key.

"We do need development and, whilst we are seeing good increase in residential and commercial consents - we need land to be released to future-proof this growth," he said.

Inner City Focus Group member Mike Steiner said it was fantastic to see retail trade figures lift 5.8 per cent in Rotorua, compared with the national average of 2.8 per cent. "Any feedback I've had from other retailers and business people is very positive and they are all very busy.

"There's definitely a general feeling of optimism and overall we are pushing in the right direction.

"I said a few years ago our time was coming, so we need to be prepared for it.

"We need to gear up, put our best foot forward, sharpen up our act and get out there," he said.