- Kawerau has become New Zealand’s leading first-home buyer market, with buyers making 44% of purchases.
- Affordable homes and local jobs are attracting first-home buyers to the town.
- "If we were to buy this in Auckland. it'd be like a million dollars."
First-time buyers feel like millionaires when they start house-hunting in Kawerau, agents have told OneRoof.
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It's because they can almost afford to buy any house they want, with prices starting at around $200,000.
Long favoured by retirees, the Bay of Plenty town has become a magnet for those getting started in the housing market.
Research by property insights firm Cotality has identified Kawerau as New Zealand's first-home buyer capital.
Nationwide, first-time buyers' share of the market hit a high of 28% in the first half of this year. In Kawerau, their share of home purchases was 44% - the country's highest.
Agents in the town aren't surprised. The Northern Group's Kelsey Little told OneRoof that he recently sold a near-new home on Mawake-Taupo Road to a first-time buyer from Auckland for $640,000.
A lifestyle property on Mawake-Taupo Road, in Kawerau, sold to an Aucklander for $640,000. Photo / Supplied
“They've got a job in Kawerau, so they transferred down here,” Little said. “They were like, 'If we were to buy this in Auckland. it'd be like a million dollars.'”
Little said out-of-town buyers were frequently stunned by Kawerau house prices.
A buyer with a budget of around $600,000 could get “quite a lot of property”, she said, noting that her Mawake-Taupo Road listing had a three-bay shed, good landscaping and a near-1000sqm section.
"You get a lot for your money, like real nice views. You couldn't get that in Whakatāne at all.”
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Little told OneRoof that most first-time buyer purchases in the town were in the $400,000 to $500,000 bracket.
She recently sold a property on Ballantrae for $440,000 and had 20 people queuing up for the first open home. “There were cars all parked down the street, people lined up, like it was a line of people… It was mental.”
Retirees were also keen on the town, she said, noting that an out-of-town buyer was showing strong interest in her listing at 5 Ramsden Place, which is inviting enquiries over $350,000.
They had plans to put a transportable home on the section and retire with money in the bank. “If you were to do that in Auckland, Rotorua or Tauranga, you couldn't afford to retire. That's a situation I'm seeing quite a lot of.”
Buyers queued up to inspect a three-bedroom home on Ballantrae, which ended up selling for $440,000. Photo / Supplied
An out-of-town buyer is considering cashing up and moving to a section with a garage at 5 Ramsden Place, priced at $350,000 plus. Photo / Supplied
She believed the price point and the employment opportunities were the main reasons first-time buyers made up such a significant part of Kawerau’s property market. It was a stark contrast to nearby Whakatāne, where first-time buyers were thin on the ground.
“I think it's they can't afford anything else anyway as well and rates are cheap there, and there’s good income there, so why not.”
Aritzo agent Liam Layland said that while Kawerau was not everyone’s first choice, many first-time buyers were using it as a stepping stone.
“It is quite a good area for people just to get a head start and go onto the property ladder. And you'll probably find that some people will stay there and maybe upsize eventually, but a lot of people use it as a stepping stone, and then they'll then move into Whakatāne.”
While Kawerau’s property prices hadn’t pulled back as much as other areas (it’s still down 11% from the peak), he said it was still relatively cheap.
A three-bedroom home at 68 Valley Road is for sale for $430,000. Photo / Supplied
A first-home buyer paid $520,000 for a four-bedroom two-bathroom home on Blundell Avenue and commutes to Whakatane for work. Photo / Supplied
Layland said $400,000 would buy a house in a nice street in Kawerau, like the three-bedroom house he has just listed for sale at 68 Valley Road for $430,000. Whereas an entry-level property in Whakatāne costs $500,000 to $600,000 for something in a “semi decent area”.
“In Whakatāne, if you've got $650,000, you can still get a nice place, but you know, not 1000sqm, top-end street and 160sqm house. So, there's definitely more bang for your buck in Kawerau. It's just you've got to have a reason to want to go there.”
He said some buyers had to factor in a possible commute, but for those working at the mills in town it was a no-brainer.
However, first-time buyers and retirees often found themselves competing with flippers and investors, who were also buying in the town.
He recently sold a unit off-market for $280,000. It had a rental income of $450 a week.
Cotality chief property economist Kelvin Davidson said first-home buyers were "rampant" in Kawerau. Photo / Fiona Goodall
“So, you know, in that sense, it's easier to get properties there that pay themselves and make a bit of a profit. You know, versus other places like Whakatāne, obviously, and Edgecumbe is just a little bit harder in my opinion,” he said.
“I know it's not the most desirable place in the world, but you know, it's still a good start for people, and for investors there's good rent.”
Harcourts agent Caleb Jeon moved to Kawerau 10 years ago and hasn’t looked back. He ran the local dollar store before getting into real estate four years ago.
“I’ve been living here for a decade now. My first year, I was a bit intimidated because of the negative news that I saw, but once I lived here, everyone is really caring to one another," he said.
“I go to New World, and everybody waves at me. We all kind of know each other – it’s a population of 7000, and there’s only one New World so everybody kind of bumps into one another. There are about 15 shops in total and therefore everybody kind of shops around here so you get to know the community quite well.”
Harcourts agent Caleb Jeon outside one of his sold listings. Photo / Supplied
He said while people might move to the town for its affordability, it was also a nice, peaceful place to live and centrally located.
He has just sold two properties on some of the town’s best streets, and both were to local first-time buyers.
A three-bedroom home on Valley Road was picked up for $430,000, while a property at Blundell Avenue sold for $567,000. Jeon said the buyer of Blundell Avenue worked in Whakatāne and bought in the town because of how much more bang he got for his buck.
“It’s somewhere in the middle of everything. It’s only 35 minutes to Whakatāne, and we’ve got Edgecumbe. Tauranga is only about 55 minutes away, Rotorua is 45 minutes away.”
Jeon said what struck him was the quality of house that could be bought was much better value than most places. Brand new four-bedroom homes on Tiwhatiwhata Crescent were selling in the mid-$600,000s.
“The quality of the house for the price that you can buy is really different compared to other towns. And our town is prospering - a lot of development is happening here and there so more jobs are being created, and our population is increasing so it’s becoming quite popular now for outsiders.”
There was also everything people needed, including a New World supermarket, schooling at all levels, a river and waterfall, a golf course, walking and biking tracks and even a free hot pool.
Cotality chief property economist Kelvin Davidson said house values in Kawerau were about half the national average, so it wasn’t hard to see why people with smaller budgets were buying there.
He said first-time buyers represented just 15% of Kawerau's housing market a decade ago. “Forty-four percent is certainly up there in terms of the national numbers, but keep in mind that’s 34 deals so it’s not exactly a massive number, but it is a strong share of activity for sure.”
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