Rotorua suburbs with the biggest equity gains revealed

Are you sitting on a property goldmine? The latest OneRoof Property report has revealed the Rotorua areas where homeowners have made the biggest equity gains. Zoe Hunter finds out which suburbs get a mention.

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Homeowners in Matipo Heights, Horohoro and Tikitere have reaped the biggest equity gain in the past five years, new figures show.

The latest OneRoof Property report looked at areas with the time between sales and biggest equity gains to identify where homeowners could be sitting on a goldmine.

It showed the top 10 Rotorua suburbs with the biggest equity gains, with homes in Matipo Heights, Horohoro and Tikitere enjoying the biggest capital gain.

A home in Matipo Heights worth $475,000 in 2014 increased $340,000 in the last five years, while a Horohoro home worth $410,000 increased $330,000 in the same period. A Tikitere home worth $585,000 gained $325,000.

The suburb with the lowest equity gain was Fordlands, Rotorua's cheapest suburb, which still saw average gains of $95,000.

OneRoof editor Owen Vaughan said Tauranga and Rotorua suburbs that had gained the most in the past five years were broadly aligned with what he had seen across the country.

Vaughan said the suburbs with the biggest gains in Rotorua were lifestyle block areas.

"The people who have gained the most are people who still have those big sections," he said.

Ann Crossley, from Rotorua First National, said if people bought a home five years ago in Rotorua they had reaped the rewards of values going up 70 to 100 per cent.

"Five years ago you might have been able to buy something there still in the $100,000s whereas now you're probably $300,000, $400,000."

Crossley said while homeowners were all sitting on more equity, the real issue for Rotorua remained a lack of housing. However, for those thinking about what to do with their equity, there were a number of options.

"I'm a great supporter of using residential property as an investment vehicle, or a savings vehicle, or a retirement vehicle.

"The interesting one is that because it's so difficult for young people to get into homes a lot of parents are using that equity figure to help young people buy."

Tremains Rotorua sales manager Megan Davies said most properties in Matipo Heights that sold for more than $1m last year were new builds.

"Some of those properties that have gone for more than $1m didn't even exist five years ago," she said.

Davies said Tikitere's gains were because of the popularity of the area.

"A lot of people are seeking a lifestyle opportunity ... We feel like that is always going to be popular because of its well-managed real estate."

Chamber of Commerce chief executive Bryce Heard said the figures reflected that property in the area was undervalued in 2014.

"We were behind and there was probably an element of playing catch-up. Rotorua was renowned for its low property prices but now we are catching up with the rest of the region."

Heard said there had been a shortage of property in the last five years.

"Population has grown faster than our houses have, which has put prices up."

Craigs Investment Partners head of private wealth research Mark Lister said it had been a strong five years for the region's property market.

"Rotorua's property market has performed really well."

Lister said selling up was potentially appropriate for some people who were sitting on a healthy amount of capital gain but they still had to live somewhere.

"You might have made these gains on property but you can only access those if you downsize or move to a cheaper suburb."

But he said property prices were still lower compared to Tauranga and he suspected there would be less disparity between prices in different suburbs.

Rotorua did not have the same price gap between suburbs as Tauranga did.

"In Rotorua, it might be harder to find a place that is significantly cheaper to tap into that capital gain."

Lister said people could choose to put their money into the share market, another property either residential or commercial, KiwiSaver, a term deposit, fixed income, or a combination of all. But how people spent their capital gain was up to the individual.

Younger people should be thinking about long-term growth, while the older generation might be more conservative, he said.