House prices in what was once dubbed the cheapest place in the country to own a bach have ballooned in Mangakino, Taupo, with properties closest to the lake now set to fetch over $1 million.
The former Ministry of Works town, which is 100kms south of Hamilton, made headlines just over a decade ago when it was revealed that the best homes near Lake Maraetai could be snapped up for under $500,000 and do-ups for about $100,000.
Those low prices are now a distant memory and a three-bedroom, two-bathroom home on Rewa Street, backing onto the golf course, is so far the only one to have hit the $1m mark when it sold in April 2022.
The average property value in Mangakino, which was originally built as a temporary settlement to house dam and power station workers during the 1940s, has almost doubled to $510,000 in the last few years, according to OneRoof-Valocity data.
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There were only nine settled sales in 2023, down from around 30 at the peak of the market. Those highest sales included a house on Kōrari Crescent and another on Waipoua Street that were sold in off-market deals for $865,000 and $845,000 respectively.
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Remax agent Kath Shaw said the town had changed exponentially in the last decade and holidaymakers usually came to the town to have a home on the lake rather than chasing cheap prices.
“I don’t think people are necessarily coming out here for cheap holiday homes because someone searching for a holiday home is generally after the section close to the lake with a house and they do pay top dollar once we can see the water.”
Houses on Korari Road, which is one of the only streets offering lake edge homes, fetched a premium, and on the rare occasion that one was for sale, it would be worth between $1m and $2m depending on the property and whether it had garaging, she said.
A three-bedroom, two-bathroom home on Rewa Street is the only house in Mangakino to have sold for six figures. Photo / Supplied
Moana Crescent, Rewa Street, Rotomanu Street and Rimu Street were also high in demand because they offered the rural outlook, backed onto the golf course and had views of the lake.
“If you are five minutes within that golf course or that lake, you are definitely paying top dollar.”
A two-bedroom cottage at 43 Rimu Street with lake views has an asking price of around $650,000.
While the most affordable homes in the town were small 50sqm cottages away from the lake without garages, one could still be picked up for $300,000 and $450,000.
“We do get people coming out here for the cheap property if they can’t afford to buy in Taupo.”
Houses with lake views such as the view from this Rimu Street cottage are the most sought-after and fetch a premium. Photo / Supplied
People were also selling up their homes in Auckland, Tauranga, Wellington and even Te Awamutu for about $1m and buying a two-bedroom to four-bedroom home in the town for between $500,000 and $600,000 in a bid to reduce their mortgage and enjoy a quieter life.
In the last few years, Taupo District Council has invested a lot of money in the town’s infrastructure and plans are underway to upgrade the area by the lakefront in response to the area becoming more popular with both locals and holidaymakers. Initial proposals include making the toilet block bigger, moving the playground and introducing possible concession sites for food trucks, retail or activity operators.
The upgrades have coincided with the town’s CVs rising by a massive 90% between 2019 and the last revaluation in 2022, which was the biggest in the district.
Shaw said while prices have jumped significantly in the past few years, they had eased since the peak of the market.
However, buyers were still very price sensitive and most properties – with the exception of those rare sites with both views and garages – were selling for around CV.
The Bus Cafe at Mangakino Lakefront Reserve, which is poised for redevelopment. Photo / Dan Hutchinson
“So buyers are looking at what CV is as opposed to the vendor or agent saying ‘hey this is a million-dollar property’.
“There’s still a little bit of a correction of the market yet to happen because while vendors may have that high expectation because the rates have increased, the buyers are still being pretty savvy about what they are willing to pay.”
Century 21 salesperson Christine Stevens said while the prices had surged in recent years, Mangakino was still affordable with most of the houses for sale priced between $400,000 and $800,000.
“When you are looking at a property in today’s terms that are in the $400,000s or the $500,000s that’s still considered quite cheap because when you go to other centres we are not in the millions of dollars yet and I don’t think we will be for a wee while to come.”
A lot of the properties for sale are ex-Ministry of Works cottages such as this one at 1/14 Totara Terrace priced at $495,000. Photo / Supplied
Stevens said in the last few years popular events such as the wakeboard champions, the lake hop and summer concerts held in the town further cemented it as a holiday destination, boosting the local economy.
The golf course, timber trail and the lake also attracted a lot of people who were buying second homes there, she said, this was why it was often one of the first places to be hit by the market downturn and one of the last to pick up.
“I don’t think the lack of enquiry we are getting at the moment is to do with prices, it’s due to peoples’ lack of ability to secure finance today is that much tougher and the requirements to get that finance plus the interest rates have got a major bearing on it. The cost of living has certainly gone up and at the end of the day people’s ability to earn a bit more hasn’t.”
The majority of homes were built in the 1940s and 1980s including a two-bedroom 1940s cottage at 1/14 Totara Terrace, that is five minutes from the lake, for $495,000.
A brand new home at 69 Huamai Street is thought to be the first new built to be sold on the open market. Photo / Supplied
While there were some new sections being developed such as the 16 at Lakeview Place priced between $395,000 and $695,000, she said there wasn’t much land to grow the town bigger than it was.
A brand new three-bedroom, two-bathroom home at 69 Huamai Street, with an asking price of $725,000, is thought to be the first new-build to hit the open market.
Stevens said Mangakino was either a place you either loved or you didn’t, but to her it was a little exclusive area especially because it couldn’t be built much more than it was.
“Six cars on the road are it’s busy - that’s what it feels like ... that’s why we say it’s our piece of paradise.”
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