The area was a family farm until 1998. Then director Peter Jackson started looking for locations for his upcoming movie (and series) centering on "The Lord of the Rings." After a few negotiations, Jackson and Company were in business. They needed some help from the authorities, because a major movie production like this one needs access to roads, power, water and sewage facilities. They worked all of that out, and the two series of films (including "The Hobbit") were made.
When it was time to pack up, the place was supposed to be returned to its original state. That transformation began, but some heavy rain stopped the deconstruction process. At that point, land owner Ian Anderson made a deal with the filmmakers to leave it all along. Part of the transaction was that he could bring the public in to see what was left of Hobbiton.
Tours of the area began in 2002, and a nice visitors' center was established to handle the big crowds that continue to come to this area for tours. That's also meant that Matamata has received a huge economic boost. Those tourists, you see, need food and hotels during their stay in the area.
I didn't go on the tour (not interested in the subject), but those in our group did say the area was quite beautiful that springtime day - even if you never had seen any of the movies. The gift shop, at least, has some very unusual items for sale. And this video shows what I missed.
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