Interesting thread, as I'm also looking at Tauranga now that we're disinclined to go for Auckland. We would probably also want to be a litle way out from the suburbs, but at least with the size of Tauranga that hopefully won't mean we're unfeasibly far away from town.
On the other hand, that does usually indicate that it's a desirable place to live. I've always preferred to get a smaller place in a nicer area, given a fixed budget.