Region defies predicted real estate slump

Housing slump? What housing slump? Especially if you live in Kawerau or Tokoroa.

Last year was meant to be the year the property market slowed but new figures from Quotable Value confirm house prices continue to rise in Rotorua and surrounding towns.

The latest figures for the residential property market show nationally there was a 9.2 per cent growth during the past year, but most areas in the Central North Island had much bigger gains.

While Rotorua's average sale price rose 14.2 per cent to nearly $238,000, Kawerau and Tokoroa had the biggest gains with increases of about 20 per cent each.

Real Estate Institute of New Zealand Rotorua spokesman Ian McDowell said the institute's figures for last year showed a slightly bigger increase of 15 per cent.

"It was a really good steady year and I think it will continue because Rotorua is still lagging behind other cities' values."

Mr McDowell said there had been a big rise in new homes being built in Rotorua which had also pushed up building prices.

He predicted that would make existing homes more attractive for 2007 buyers.

But business is still pumping for Rotorua builders, most of whom have work booked for the next six months.

Rotorua builder Roland Tissink said it was hard to find enough staff to keep up with the work.

"We used to do a lot of alterations and extensions but now we tend to build. I think there will always be people that build when you look at how many sections are being sold - someone's got to live there."

Kawerau Century 21 real estate agent Anita Moore said the days of picking up a good house in Kawerau for $40,000 were long gone.

She said there was still strong interest from investors but they realised now they had to pay more.

"A well priced house doesn't last long."

Pam Harrison from Century 21 in Tokoroa said there was no slump last year and indications were there would not be one this year.

In 2004, there was a huge rise in Australian investors snapping up Tokoroa rental properties for about $60,000 or less. Since then, most had sold them again, picking up between 50 and 100 per cent in profits.

Four years ago, an upmarket five-bedroom home in Tokoroa was selling for $250,000 - now they are still reasonably priced at about $350,000.