Kawerau best place to invest in property over last 10 years

A small town with high unemployment and ongoing gang problems has topped a list of the best places to have invested in property over the last decade. 

Kawerau values rose 112 percent between 2010 and 2020, new figures released by realestate.co.nz show. The average asking price in 2010 was $153,579. By December last year, it was $325,542. 

Coming in close behind were Auckland's Rodney and Waitakere regions, up 87 and 86 percent respectively.

Realestate.co.nz spokesperson Vanessa Taylor says it shows investment in infrastructure flows through into housing demand. 

"The increased stimulation in the economy drives more jobs. We are seeing demand for rentals, but then also people being able to buy those properties." 

In the last 10 years, Kawerau's unemployment rate has been as high as 25 percent at times, more than three times higher than the country's overall worst figures. The town, population 7000, recently received a multimillion-dollar boost through the Provincial Growth Fund.

"These recent boosts to industry, training and infrastructure via the Provincial Growth Fund as well as a general upward trend in employment rates since 2014 could suggest that Kawerau is on the up," realestate.co.nz said.

Across the wider Bay of Plenty, prices went up 56 percent. Tauranga saw 44 percent growth and Rotorua 26 percent. 

But the good times for investors and owners didn't reach Whakatane, where values plummeted 33 percent - the worst return in the country. Economist Shamubeel Eaqub told The AM Show on Thursday he suspects different kinds of houses were being sold 10 years ago in Whakatane, and the reality isn't quite as bad as it looks.

"I think that'll come back. A lot of the new houses that are coming through in Whakatane are the larger McMansion styles. I wouldn't be overly worried about those places."

The realestate.co.nz data notes Whakatane's 2010 average of $872,908 appears to be "an anomaly and may be due to outlying high or low average asking prices on listings during a given year". The following year prices were at a more reasonable $385,989 - so from 2011 to 2020, prices in the city rose 51 percent, more in line with the wider region.

Shamubeel Eaqub.
Shamubeel Eaqub. Photo credit: The AM Show

Excluding Whakatane, Waitomo saw the biggest fall - 20 percent - followed by Greymouth (11 percent).

But most regions saw prices rise, thanks to pressure from the increasingly unaffordable cities. Prices went up 67 percent in central Otago, 47 percent in Queenstown, 62 percent in Porirua, 38 percent in Wellington, 63 percent in Hamilton, 45 percent in Manukau and 56 percent in Auckland City. 

"I don't feel like in the Auckland housing market, people have lost confidence," said Eaqub. "They haven't...  In places like west Auckland, that's where all the growth has been. Auckland's seen massive growth and we've seen big changes in the way the market operates - lots of new developments, lots of new houses coming through. Places like west Auckland, south."

Auckland's housing market, 2010-2020.
Auckland's housing market, 2010-2020. Photo credit: realestate.co.nz

Eaqub said parents hoping to sell up and cash in once their kids leave home might be forced to rethink their plans.

"They're probably going to hang around because they can't buy their own houses."