Bay of Plenty is an attractive area due to its climate, beaches, tourism and lakes. This makes it an option for investors to purchase properties in these areas to get good yields and potential for capital gains. Since 2003 rents have steadily increased in all five areas including Tauranga, Whakatane, Tokoroa, Rotorua and Taupo. We take a snap shot of these areas and break them down to identify how they have performed.
Tauranga
Tauranga has become the mecca of not only rent increases but also capital gains in the Bay of Plenty and comes up the bread winner in the area. Property prices are higher on average in Tauranga and a lot of more retired kiwis are heading here for the climate and relaxed life after cashing out of Auckland’s massive boom.
However, it didn’t use to be this way. Back in 2003 Tauranga had similar rental prices to Taupo. Not until around 2007 did Tauranga start to move ahead and become the number one city in Bay of Plenty for the highest rental prices for a 3 bedroom property on average. Taupo tried to beat Tauranga every now and then, but we think Tauranga now has too much of a lead and a good solid property stock which is well above Taupo or any other Bay of Plenty city.
Whakatane
Whakatane started in 2003 with similar rental prices as Rotorua, but then Rotorua took off in 2005 to be at par with Taupo right through to where we are at now in 2018. Both towns having a similar population Whakatane around 36,000 and Taupo around 33,000. With plenty of retirees either going for the seaside or the lakeside as their options for lifestyle. Taupo was meant to be the Queenstown of the North Island though property prices have not eventuated to show that is true.
Tokoroa
Tokoroa being the little brother of the Bay of Plenty wasn’t so small, back in the late 1970’s the town reach 20,000 enough to call it a city. But with the city then relying on one main industry, forestry, the two main employers downsized and now Tokoroa has a population of less than 14,000. Its still a popular area for investors with cheaper properties than other areas in the Bay of Plenty and high yields to match. With high unemployment, lack of new jobs and a drug problem this has kept rents lower than its other Bay of Plenty cities.
Rotorua
Back in 2003 Rotorua was at par with Whakatane rents for an average 3 bedroom house. But over time Rotorua has been the poor cousin with lower average rents behind Tauranga, Taupo and Whakatane. But this all changed in 2017, Rotorua rents have nearly caught Taupo and Whakatane making the city more competitive and not a lonely and distant third place anymore. Could we see Rotorua pass its closest rivals and challenge Tauranga, only time will tell.
Taupo
Taupo started off with a hiss and a roar in 2003 making it a very popular place to live because of its lake, ski fields, being the centre of the North Island and accessible for many areas. However, Taupo couldn’t outperform Tauranga and as mentioned above kept steady with Whakatane rental prices. Retirees moved to Taupo over many years however we think Tauranga has seen more retirees looking for slightly warmer weather and the beaches of Tauranga area to make it their home. Tauranga has had the strength of a good job market and the major port to help keep jobs and rents increasing. It will be interesting to see over the years to come if renters start to avoid Tauranga because of higher rental prices and head to Taupo. Or could Tauranga really push forward and become the Queenstown of the North Island.
█ = Tauranga (3 Bedroom House)
█ = Whakatane (3 Bedroom House)
█ = Rotorua (3 Bedroom House)
█ = Tokoroa (3 Bedroom House)
█ = Taupo (3 Bedroom House)
Statistics and graphs provided by Landlords.co.nz
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