regional review: tauranga
living In the sunshine With its beaches, attractive residential areas and growing population, Tauranga is a great place to invest, says Monique Balvert-O’Connor.
Tauranga was finally included on thriving industries connected to the dairy “This is a the TV One and TV3 weather webcam and pulp and paper industries. popular, last year, officially recognised as one of the It is home base to big name businesses vibrant, largest cities in New Zealand. such as Zespri, Comvita, Pingar, And, if it is economic rather than TrustPower and FIL. growing city weather patterns being predicted, then the It’s a city that opened its doors this where capital forecast for this city in the sunny Bay of year to a new secondary school, while gain can be Plenty is far from gloomy. earthworks have started at the site of made.” – Helen So say those monitoring the economic another, bringing the number of secondary trends and development of this city that is schools within the Tauranga City Council Barnard home to Australasia’s most efficient port, a boundaries up to eight. And all indications variety of emerging enterprises, thousands are that a university campus is only a few of small-to-medium businesses, and years away. venture taranaki COURTESY P H OTOS
50 NZ property investor // july 2011 www.propertyinvestor.co.nz // NZ property investor 51 regional review: tauranga
Strong connections with the University different to the nationwide picture.” “I know several of Waikato already ensure that eight He found property prices compared to executives degrees can be started and completed in income “a bit on the high side”. Tauranga, and the Bay of Plenty Polytechnic “They have come up a long way over who have been also has a strong presence in this city. the last 10 to 15 years, partly due to the offered very An average of 32 people a week move strength of demand and population Both Tauranga and attractive jobs into Tauranga, where the lifestyle is a major growth.” Mount Maunganui are drawcard. Mount Maunganui – one of New He says the investment in roading built around the water, internationally, beaches and a safe which they Zealand’s most popular beaches – is within infrastructure is likely to start opening up harbour. the city boundaries. areas around town that weren’t necessarily have turned Tauranga is a growing city with clout. as attractive to homebuyers before. That down because Andrew Coker, who heads the city’s does influence property values and is Barbecues are part of the economic development agency Priority something for investors to bear in mind, easy summer lifestyle. their growing One, says Tauranga has a shifting Kiernan says. families are landscape. Tauranga realtors say the current steady really happy “Our economy over the next 10 years will and stable situation means those entering here.” shift from one driven by population growth, or climbing the property ladder can feel to one with real depth in terms of high Tauranga is known for more confident about acquiring a good – Max Mason value, productive businesses. good food and wine. The deal on a quality new home or investment Sebel Hotel is one of the “Tauranga offers very competitive property. newer developments in propositions for businesses.” the city. Shayne Donovan-Grammer of QV Exciting things are happening. This Valuations says with Tauranga’s sizeable The growing tourism month the Government’s ultra-fast and fast-growing population comes a pool industry is bringing broadband project kicks off in Tauranga immediately above Auckland. Overall, waiting room” mantle. Through the mid of buyers and a chance to sell, and it’s a new businesses to the and the city continues to welcome an influx while the nationwide measure of economic to late 1990s and early 2000s, Tauranga’s desirable city for those looking to build a area. Cruise ships berth in companies relocating to be close to the activity slipped 0.1%, the Bay of Plenty strong population growth featured a portfolio of rental properties. 250m from Mount Maunganui’s main Port of Tauranga and a pool of skilled and recorded an increase of 0.7%. disproportionate amount of elderly people Property manager Helen Barnard says street. semi-skilled workers. The trends report states the Bay’s opting to live in Tauranga. Today there’s a Tauranga tenants are generally looking for Relocating companies are as varied labour market perked up in the March broader mix of population. well-presented three-bedroom properties as Morgan Furniture, VNC Cocktails, quarter with the number of employed A report released by a consortium within the $280 and $350 weekly price BidVest, and IT businesses. Australian rising 3.2% to 6.6% – that’s more than of economists found migrants to bracket. Anything above $450 is considered manufacturers too are making inquiries. twice the nationwide rate of increase. Little Tauranga between 2001 and 2006 were executive in Tauranga and caters to a very A major project on the drawing board wonder then that Infometrics economist predominantly aged between 20 to 45 – a niche market, she says. is the tertiary and research campus that is Gareth Kiernan describes Tauranga as “a total of 53% of migrants from Auckland Tauranga’s high demand areas tend to being set up through a partnership between viable place to live in terms of employment to Tauranga, for example, were in this age be anything close to the CBD, such as the the University of Waikato, the Bay of opportunities”. bracket compared to 22.5% being over 60 Avenues, as well as other prestigious areas Plenty Polytechnic and Te Whare Wananga These are not one-off positive readings. years of age. Tauranga is retaining its power such as Bethlehem, Pyes Pa and Otumoetai. o Awanuiarangi. Research, training Late last year the bank’s trend report to attract young people. While Matua too is considered a residential and education linked to the business showed the Bay recorded the strongest rate “In our interviews it was emphasised area of choice, few rental properties are community’s needs will be a focus. of annual economic growth, lifting 3.5% that Tauranga is seen as a lifestyle location, available there, Barnard explains. “A fundamental focus for Priority One from a year earlier. which is possibly a factor behind this Areas tending to have a less favourable healthy pool of tenants here. countries and rates Tauranga as “without is to ensure our city is appealing to the In short and in the words of Kiernan, trend both for mid-career moves and reputation include Merivale and parts of “With good management, a well-looked- question the family-friendliest city there is”. younger demographic so we can retain and Tauranga city is doing “okay”. for retirement. So too may be the lure of Gate Pa and Greerton – although the latter after property should be rented year-round. “I know several executives who attract young, talented, skilled and creative Why it is faring well relative to the relatively affordable housing compared to has the bonus of being within the Tauranga The rental yield is less than in Auckland, have been offered very attractive jobs people. Then we will have no trouble national average is, he says, due to factors Auckland,” the report stated. Boys’ and Girls’ College zones. but Tauranga is a good place for long-term internationally, which they have turned attracting those businesses that will need such as the city’s exposure to the primary Figures released recently by the Real Many of the suburbs – even the more investment. This is a popular, vibrant, down because their growing families are them. We are seeing that shift happening sector (dairy and forestry, for example) and Estate Institute of New Zealand show the desirable ones - have “unattractive pockets”. growing city where capital gain can be really happy here.” already,” Coker says. the high commodity currently prevailing, a median sale price for Tauranga properties While properties in Mount Maunganui made,” Barnard says. Helen Barnard shares his sentiments. A challenge in the past has been the lack successful port, and population growth that in March sat between $340,000 and are in huge demand over summer, Barnard In May the most expensive house Tauranga is a city big enough to cater for of substantial, internationally competitive, helps the economy tick along. $360,000. Across the harbour bridge in says, tenants are aware that many landlords listed for sale was a humble beachfront a steady stream of new businesses plus export-focused businesses, but that too is Tauranga City Council’s population is Mount Maunganui – and further down expect them to vacate over summer when property on a 4866 square metre site with offer great schooling, shops, restaurants changing, Coker says. estimated at 114,300.In 1975 it stood at the coast in Papamoa – the median was high yields can be made. This obviously a $7.9 million price tag. In contrast, a and coffee, yet small enough to ensure All up, it’s not surprising then that, 43,414 and grew to 103,635 by 2006. Its $432,500. These sales trends were in line impacts on desirability. one-bedroom apartment on Waihi Road in parking and accessibility is not a problem. according to the most recent National growth between 1996 and 2006 has been with March 2009 and 2010. More than 100 Barnard, who moved to Tauranga Tauranga listed at $170,000. Proximity to Auckland, Taupo, Rotorua and Bank regional trends report, Tauranga - recorded at 33%. It has slowed down, but properties sold in Tauranga in March, and O F PLENTY from Auckland, has been in property Donovan-Grammer says several sales Hamilton is a plus. and its region the Bay of Plenty – scored the city’s population growth is still above 78 in Mount Maunganui and Papamoa. management for 15 years. are coming in under $200,000, which was “We have the beach on one side and the well on the economic activity scale. Eight the national average, Kiernan says. The Kiernan says Tauranga is falling around “Tauranga is a good place to invest. practically unheard of during the property bush on the other. I would happily be a of the country’s14 regions registered a majority of people moving to the district average in terms of price and sales trends. M B AY TOURIS You can get lots of properties at a cost boom a few years back. Tauranga ambassador – it is just one of the rise in economic activity and of those the are from the Waikato and Auckland. “There are signs of stabilisation, but not significantly less than what you would pay Tauranga Chamber of Commerce CEO most beautiful places in New Zealand to
Bay of Plenty ranked third highest, sitting Tauranga is also shaking off its “God’s rapid pick-up at this stage, which is not too p h otos: in Auckland, for example, and there is a Max Mason has lived and worked in five live.”
52 NZ property investor // july 2011 www.propertyinvestor.co.nz // NZ property investor 53 regional review: tauranga CLIFF and JULI Tolley’s investor guide to Tauranga Property Managers, Quinovic Tauranga QV and Mt Maunganui, Bay of Plenty Jonno Ingerson, research director qv.co.nz
Te Puna Mount – includes Omanu Gate Pa, Greerton rented property type by area NUMBER OF bedrooms of rented houses With more of a rural outlook, Te Puna has The Mount has a consistently strong demand This is an older community with some classic some very nice houses with large lots and for rentals with a greater demand in the brick and wooden homes. There are some 100% 100% 100% 100% gorgeous views, surrounded by orchards. summer season. There is a broad mix of pockets of lower-income homes, so caution Only 15 minutes from town. housing, townhouses and apartments and the is required when selecting neighbourhoods. Mount also offers upper-end apartments and But, you will find some really good buys with high returns. 80% 80% 80% 80% homes on Marine Parade. The Mount is very popular with professionals and families at the upper- and middle-end income brackets. bay of plenty Bureta/Otumoetai/Matua 60% 60% 60% 60% One of the sought-after areas – easy access Mount into and out of town; close to schools and Pyes Pa, Tauriko all other amenities. Consists mainly of older Maunganui Lots of new housing tracts and the new 40% 40% 40% 40% two- to four-bedroom homes of good quality. bypass road that provides easier and You will find apartments and executive-style quicker access in and out of Tauranga city. living through to multi-million dollar houses. Excellent school zone. Attracts families BEDROOMS BEDROOMS looking for modern housing and planned 20% 20% 20% 20% BEDROOM APARTMENTS BEDROOM APARTMENTS communities; as a result draws higher rents. BEDROOM FLATS BEDROOM FLATS A go-ahead area with new supermarkets Tauranga Central – planned, doctors’ offices, and mountain BEDROOM HOUSES BEDROOM HOUSES 0% 0% 0% 0% includes Avenues biking/running paths. Good playgrounds Matua The central business district and Avenues are and fields. always in high demand because of the proximity to amenities like shopping, medical facilities, GREERTON BETHLEHEM GREERTON BETHLEHEM GREERTON BETHLEHEM GREERTON BETHLEHEM OTUMOETAI OTUMOETAI OTUMOETAI OTUMOETAI MT MAUNGANUI MT MAUNGANUI MT MAUNGANUI MT MAUNGANUI PYESWELCOME PA/HAIRINI BAY PAPAMOA BEACH PYESWELCOME PA/HAIRINI BAY PAPAMOA BEACH PYESWELCOME PA/HAIRINI BAY PAPAMOA BEACH PYESWELCOME PA/HAIRINI BAY Bellevue/Brookfield/PAPAMOA BEACH schools,2 and entertainment. One of the oldest TAURANGA CENTRAL TAURANGA CENTRAL TAURANGA CENTRAL TAURANGA CENTRAL Judea areas in town, you’ll find a mix of people who An up-and-coming rental area. Research like to walk to work, professionals, and students look for houses here. This area draws good used for this Tauranga have the lowest proportion of houses, and a Tauranga Central. In the other four areas neighbourhoods before buying – there are The five areas pockets of really nice houses but other rents and has high appeal. regional review are Tauranga Central/ correspondingly higher proportion of flats the rent increases of three to four percent areas that might be a challenge. Houses Greerton, Bethlehem/Otumoetai, Pyes Pa/ and apartments. Apartments form 20% of are well above the national median of 1.6% rent quickly if they have good insulation and Papamoa Hairini/Welcome Bay, Mt Maunganui, the rental market in Mt Maunganui, and for three-bedroom houses. heating. tauranga 2 Beach and Papamoa Beach. The rental data for 11% in Tauranga Central/Greerton. Apart from in Pyes Pa/ Hairini/ Brookfield Bayfair each area is then matched to housing Three-bedroom houses make up Welcome Bay the rent for flats increased by Judea Maungatapu, Ohauiti, information from our database to between 62% and 66% of the rented houses between 4.0% and 4.5%, which is around Bayfair has excellent services, a good public Welcome Bay transport system and only a short walk or determine house prices and therefore in all five areas. Two-bedroom houses the national median of 4.2%. In Pyes Pa A mix of new to older houses with some of the drive to the beach. This area is popular with 2 yield. The yield is calculated as the make up a small proportion of the rental there were only 21 bonds lodged in the Bethlehem best views that money can buy, but be careful middle- to lower-income families. annualised rent divided by the sale price market in Pyes Pa/Hairini/Welcome Bay, period so the stats for that area should be with some of the lower-lying areas. Mainly four- bedroom houses with one to two bathrooms. (as a percentage). This data, and more, a little more in Bethlehem/Otumoetai and treated with some caution. People move into the area just to have their Maungatapu 2 is available through subscription to QV’s Papamoa Beach, and about a quarter of the The gross yield of 6.2% for three- Bethlehem kids go to the Selwyn Ridge school zone. 29 Papamoa Property Investor website QVInsider.co.nz rented houses in Tauranga Central and Mt bedroom houses in Pyes Pa/ Hairini/ This area has a great semi-rural feel with Maunganui. The areas of Pyes Pa/Hairini/ Welcome Bay is well above the nationwide good location for access to Tauranga. There is consistently strong demand for rentals in this area with families. Rentals Market composition Welcome Bay and Papamoa Beach have 5.4%. The yield is slightly above the national Predominantly newish 90s housing. Always Welcome Bay sought after. are mainly new brick-and-tile, three- and The rental market in Pyes Pa/Hairini/ around a quarter of the rented houses as average in Tauranga Central/Greerton, and four-bedroom homes. It is drawing a good Welcome Bay and Papamoa Beach is four or five+ bedroomed. below in the other three areas. long-term tenants paying market rates. predominantly houses, with just a small For flats the gross yield in Tauranga proportion of flats and apartments making Rent and Yield Central/Greerton and Bethlehem/ up the rest of the market. Bethlehem/ By matching rental data to sales data we Otumoetai matches the national average Otumoetai has 83% houses, 15% flats, and can look at rent, price and yields for three- of 4.8%. The yield for flats is much lower 2% apartments. Both Tauranga Central/ bedroom houses and flats in each area. in Mt Maunganui and Papamoa Beach, Greerton and Mt Maunganui have quite a Rents for three-bedroom houses have putting both areas well within the bottom different mix. Of all the five areas, these two risen by a few percent in all areas except 20% of areas across New Zealand.
Three-bedroom Houses All Flats rent median gross rent median gross area bonds rent growth sales price yield bonds rent growth sales price yield Pyes Pa/Hairini/Welcome Bay 201 320 3.2% $270,000 6.2% 21 210 -5.4% $262,500 4.2% Tauranga Central/Greerton 266 300 0.0% $269,000 5.8% 121 240 4.3% $261,000 4.8% Bethlehem/Otumoetai 266 330 3.1% $330,000 5.2% 81 245 4.3% $265,000 4.8% Mt Maunganui 220 340 3.0% $348,500 5.1% 91 260 4.0% $351,000 3.9% Papamoa Beach 184 340 4.0% $365,000 4.8% 31 230 4.5% $315,000 3.8% New Zealand 27503 320 1.6% $310,000 5.4% 16967 250 4.2% $271,375 4.8%
54 NZ property investor // july 2011 www.propertyinvestor.co.nz // NZ property investor 55