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Tauranga's legacy – shiny new infrastructure and big debt

Tauranga's council has trimmed over-optimistic population growth forecasts in the face of slowing development.

Last week, National Business Review print edition detailed how companies from around New Zealand and overseas are considering moving to the Bay of Plenty city, attracted by proximity to the port on relatively cheap industrial land.

In the second part of our series, NBR shows in this week's paper how Tauranga City Council's investment in infrastructure over the last decade has sparked a huge rise in debt.

At the very time Tauranga needs a growing ratepayer base to pay for its infrastructure work the city has suffered a severe decline in building activity.

Auckland is expected to soak up 60% of the country's population growth over the next 18 years, but is that the best thing for our biggest city or the country as a whole – especially considering Tauranga is just 2.5 hours down the road?

dwilliams@nbr.co.nz

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Comments and questions
3

It would be nice if real estate was cheap in Tauranga, but it's not.

Most development land is held by a handful of big players, who are hoping the retired will more there way to pay their inflated asking prices.

This approach has worked for decades, but the supply is much greater than the retired can absorb. While prices could well hold, due to the relatively low-wage local economy, don't expect any appreciation any time soon.

Until industrial rents are $60 per square metre for new builds (because most older premises have design obsolescense), the position isn't going to change.

The issue is access. SH29 is just a pain in the ass. Now if it had a large wide-body jet airport and international capability, aka Christchurch, then it'd be a really interesting alternative.

The issue of retired people and Tauranga is a myth - only 16.9% of Tauranga's population is 65 years or over and the number grew by only 0.1% between the last two censuses. In the Western Bay of Plenty, the percentage aactually fell.