Kawerau house prices are booming and the town's mayor is not surprised.
Figures released by realestate.co.nz show the average asking price in Kawerau has more than doubled in the past decade – the biggest increase of all districts nationwide.
In 2011, the average asking price for a home in Kawerau was $151,000. By the end of 2020, this figure had increased 132 per cent to $351,413.
Mayor Malcolm Campbell said he was not surprised at the news as there were now many new faces in the small town that he didn't recognise.
"I'm starting to be a stranger in my own town because there are all these new people coming in," he said.
"But prices had to go up, didn't they, because we have been well behind for some years. It's all good news."
Campbell said prices in Kawerau had been ridiculously low for many years and these prices were starting to reflect the true value of homes in the district.
He said this began in the 1970s when many people were laid off from the local mill, the largest employer in town, and began to leave Kawerau for jobs elsewhere.
"A two-bedroom house was going for $4000; a three-bedroom was $6000 and brand-new homes around River Rd were going for $15,000 – brand spanking new homes," he said.
"I built in the 70s here and that cost me $25,000."
Campbell said it was at this point investors came in and made 47 per cent of the homes into rentals.
Now, first home buyers and retirees are starting to see the value in Kawerau where quality homes on decent sections can still be purchased for a good price.
Many retirees are motorhome enthusiasts and see the town as a home base from which to travel the country.
Campbell said one of the issues now facing the town was that it would find it hard to keep up with its own growth.
Several groups in the community have received multi-million-dollar grants from the Provincial Growth Fund for industry, training, and infrastructure. With this comes an increased demand for housing for people seeking job opportunities.
Campbell said the Kawerau District Council had to be creative when meeting this challenge as it was a small district, the smallest in New Zealand, and landlocked by iwi-owned land.
The council has been making land available for residential subdivision, including a council-owned retirement village.
It is also looking at removing the reserve status from Stoneham Park to make it available for residential development – something Campbell is pushing to happen.
"That's the only land we have now that's available to do something with," he said.
"We are working with Whakatāne at this time about creating a housing development in the Whakatāne District close to Whakatāne for workers to come and work here. That's a big deal. I think some huge progress will happen in the next 12 months."
Harcourts real estate agent Lewis Ramsay has been selling houses in Kawerau for the last 20 years and said the town was proving popular with retirees and first-home buyers.
"Kawerau had been undervalued to start with and then suddenly a lot of retirees heard about it, cashed up, and moved in," he said.
"I've seen it, in the last five years there have been huge increases."
Ramsay said consequently, rentals were now scarce in the town and people who had bought homes were working on improving them.
He said the work the council had been doing to tidy up the town had also drawn more people along with new buildings such as Tarawera High School and the medical centre.
Despite the rise in prices, Kawerau is still the cheapest place to buy in the Bay of Plenty.
Western Bay of Plenty tops the table for the highest prices with an average asking price of $992,948. Tauranga is second with an average price of $893,258.