Life in Rotorua suburbs where property values are hot - and not so hot

John Prentice has enjoyed house values rising in Koutu but worries about people struggling to buy their first homes. Photo/Stephen Parker

By Sinelle Fernandez
John Prentice retired in Koutu 14 years ago and has watched the area grow with new developments.

"Rotorua is a very nice place to live," he said. "The standard of housing is improving here, especially in our suburb."

Not so surprising then, is the rising house values in these streets stretching four blocks west from the shores of Lake Rotorua - almost, but not quite, to State Highway 5.

Koutu is also close to the city, and the Prentices enjoy the "well set up park" on the main road.

Increases in house values in the past three years show Rotorua's property market is far from ready to cool down.

In the QV House Price Index released on Monday, figures showed a growth in house value across the country, with the exception of a few suburbs which had decreased.

Across the regions, Rotorua had some of the highest increases of value in the last three years, with some extending well over 100 per cent.

The top three suburbs were Koutu (147.8 per cent), Glenholme (123.5 per cent) and Mangakakahi (101 per cent).

As a potential vendor, Mr Prentice said he was alright with the increasing values as he could sell and buy on the same market.

Yet, he agreed this could have a negative effect on people who struggled financially to keep up with the market.

"It worries me," he said.

"It's a country-wide problem that the government hasn't addressed. Recovery in housing and rent has to be led from the top, and that's what the government's job is."

Koutu has experienced house values rising by 147 per cent in the past three years. Photo/File

However, Koutu was still decently affordable, he said.

"There are a lot of low-cost houses in Rotorua and particularly in our area. You can buy a reasonable house for $200,000 - you'd probably have to do a bit of work on them, but you can get on the ladder of housing quite easily here."

The median price for June 2014 in Koutu was $100,500. As per May 2017, that number is $249,000.

Although there were no suburbs in which house values decreased over the past three years, some only increased by a small fraction.

Barely 2km west of Mr Prentice, Pukehangi increased 0.6% from an average price of $309,000 in June 2014 to $311,000 in June 2017.

Pukehangi resident Angela Pubben said this could be because not a lot of care goes into some of the houses in some areas.

"More than half the houses [in this area] are not that nice, but there are still good homeowners here that I've met," she said.

She thought it could be the "not as nice" houses are rentals as opposed to owned homes, but said that was just her speculation.

For people who struggled financially, Miss Pubben thought it would have a positive effect, since the increase was small.

The only downside of the area, she said, was local parks could not be enjoyed.

"With the parks and things that we do have, people just wreck them. I always take the kids out of the area [to go to the park].

This, she said, was probably a bigger reason as to why the suburb's overall value had not increased by much in the past three years.

"There's a lot of riff-raff in our area and I wish there wasn't."