When Mary Hiron decided to leave Hamilton for her retirement, she could comfortably buy a house in South Waikato, but says she would struggle to do so now.

Home prices in South Waikato have greatly increased in the last 10 years.

New figures from CoreLogic show that the district’s average price rose 249% from $135,450 in September 2012 to $472,654 in September.

This is the second highest rate of price growth in the country during this period.

Former Leader of the Opposition, leader of the New Zealand National Party and Governor of the Reserve Bank of New Zealand, Don Brash, recently spoke with BuzzWorthy talk about the housing situation in New Zealand.

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Hiron and a friend paid $300,000 for a house they bought together in Putaruru six years ago, and since then the value has risen dramatically.

Six months ago it was worth $700,000, though it’s down to around $500,000, she says. CoreLogic puts the current median price in town at $541,100.

“These prices would have made buying a home a problem for me, and they make it harder for locals looking to buy now.

“Prices are still cheaper than in many other areas, so during the height of the recent boom, there were a lot of people from out of town coming to buy.”

House prices have increased significantly in recent years.

But there was a limited supply of homes on the market, and when some of Hiron’s friends wanted to buy in the town a year ago, there was nothing to see.

“Although this situation seems to have diminished nowI understand that rentals are hard to come by, and that also has an impact on locals.

Some housing development projects are underway and another retirement village is being planned, she says.

“Greater supply can help reduce the cost of housing and lead to much-needed improvement in local stores.”

Putaruru is not the only town in the district to feel the impact of rising prices.

Tokoroa has a lower median price, with CoreLogic putting it at $446,000.

But over the past 24 months, it has seen the biggest average price increase in the Waikato area, said Shon Meszaros of Property Brokers Tokoroa.

After the global financial crisis, the city’s market was a bit slow, but prices rose and then jumped again over the boom from 2020 to 2021, he says.

This was driven by three groups of buyers – investors, retirees and first-time buyers – who were attracted by Tokoroa’s prices, which are more affordable than those in Auckland, Hamilton or Tauranga.

Pensioners can cash in on a million dollar house in Aucklandand buy a good house here for $400,000, and have funds left over, while first-time home buyers who can’t get into the market in one of the bigger cities can here.

While the city used to have a reputation for being a bit rough, that has changed, Meszaros says.

There are employment opportunities in agriculture in the city.

There are employment opportunities in engineering and agriculture, a strong demand for skilled trades, and a new milk processing plant and vocational training center are being built.

“It’s made people more excited about moving here, and there’s been a big change with a lot of new families coming in, which is positive.

“But it made the market more difficult for some locals. A paradigm shift in thinking was needed, because it used to be very cheap, and it’s not so cheap anymore.

“It’s great for sellers, and many have made nice gains, but it’s tough for first-time buyers, especially since there hasn’t been much construction since the 1980s and there is a shortage of two bedroom unit type properties.”

Rental supply is very tight and rents have gone up, but not too much, he says.

South Waikato’s 10-year price increase may be huge, but it’s not the biggest in the country.

Kawerau in the Bay of Plenty took first place, with a 260% increase, according to figures from CoreLogic.

The average price for the small provincial town rose from $118,293 in September 2012 to $425,633 in September.

Prices have been hit hard in the GFC, but from 2014 onwards they have steadily increased, although the pace has picked up during the recent boom.

Kathryn McKay, branch manager of Property Brokers Whakatane, says the vast majority of buyers come from out of town.

They are made up of investors, first time buyers and retirees from Auckland and Tauranga.

“The general feeling about Kawerau has improved over the years, with more and more people seeing it as a place of retirement.”

There are big employers, including Asaleo Care, Oji, Carter Holt, Mercury Geothermal and Sequal, and industrial development continues, she says.

“The positive publicity the town has received regarding its industrial growth has been a big reason we’ve had the influx of out-of-town buyers. They see the town as a town full of future potential.

But rising prices are impacting people who already live in Kawerau, and his agents haven’t seen much movement from residents upgrading or moving to another house, McKay says.

“There is a huge demand for rental properties, but the supply just isn’t there, and that has also led to higher rental prices.”

Horowhenua in Manawatū-Whanganui recorded the third highest 10-year price increase in the country, according to figures from CoreLogic.

The district’s average price rose 213% from $194,541 in September 2012 to $607,983 in September.

Roz Wallace of Ray White Levin has worked in the area for 15 years and says there has been a huge price increase over that time.

The opening of the Kāpiti Highway and, more recently, Transmission Gully have played a role in this, as they have opened the road to Wellington and made travel easier, she says.

“But it’s important to note that there was a sharp rise in prices after the first Covid lockdown, and then they have fallen sharply this year since last year’s peak in October.”

First-time home buyers arriving in the area are strong in the market, although their numbers have dwindled somewhat, she says.

“There is always excellent value for money at Levin. The difference between what you can get for $600,000 here versus Wellington is significant, and listings have quadrupled since last year, so shoppers have more choice.

Rising prices have made it harder for residents, but rental supply has recently shrunk and there are more homes available for rent, which is good for renters, Wallace says.

“There is also more construction going on, with the council putting in place measures to free up more land for development, including affordable housing.”

Rangitikei in Manawatū-Whanganui and South Wairarapa in the Wellington region round out CoreLogic’s list of five areas with the highest 10-year price increases.

The average price in Rangitikei increased by 208% from $151,604 in September 2012 to $466,832 in September, while in South Wairarapa it increased by 205% from $282,938 to $862,834.

In contrast, the national average price increased by 136% in the years between 2012 and 2022, rising from $414,008 to $977,158.

CoreLogic’s chief real estate economist, Kelvin Davidson, says the 10-year period masked a number of cycles that had occurred, but the areas with the biggest increases all had much cheaper prices to begin with.

These more affordable prices and a lower base rate meant their prices had more natural room for growth than in places like Auckland where prices have started to rise, he says.

“But these are all smaller, more provincial regions, with a smaller population and fewer economic drivers than the main urban centres. So while their price upside was significant, they are also potentially more vulnerable on the downside.

-Miriam Bell/trick.