Western Bay property values continue to climb, as homeowners brace for another possible interest rate hike next week.
Tauranga recorded a 5.1 per cent rise in the year to May to an average value of $450,614, according to state valuer Quotable Value. Western Bay recorded a bigger jump at 8.2 per cent to an average value of $417,637.
Despite the increase, local values remain down on their 2007 market peak.
Nationwide, property values jumped 8.2 per cent over the past 12 months to $471,791, and are up 13.9 per cent on the 2007 market peak.
However, the increase was mainly driven by the overheated Auckland and Christchurch markets.
QV Tauranga registered valuer Mairi MacDonald said the Tauranga market was steady and had increased slightly.
"There does seem to be a positive feeling in the market at the moment."
Well located higher-end properties in areas such as Otumoetai and Mount Maunganui were selling well, she said.
Papamoa also had good new housing developments that were selling well, as were properties at The Lakes development near Pyes Pa. But entry level properties in the mid-$200,000s were selling more slowly. "There is still good demand for this level of property, however, and the rise in interest rates doesn't seem to have had an impact yet."
LJ Hooker Tauranga agent Stephen Pepper said higher-value properties were selling, with one of his agents selling four properties for between $500,000 and $750,000 last month.
At least two of the four properties had sold to buyers coming from Auckland and Wellington, who had sold properties of higher value and moved into the region.
Realty Services Bay of Plenty chief executive Ross Stanway said the QV figures showed an on-going trend of a steady increase in local property prices.
Reserve Bank lending restrictions, which placed a 10 per cent cap for bank lending to those with less than a 20 per cent deposit, were still taking first-home buyers out of the market, he said.
QV national spokeswoman Andrea Rush said that, while values in all the main centres had increased to varying levels, some areas within the cities were showing decreases and values in many of the smaller regions were flat or decreasing.
"Sales volumes around the country are 10-15 per cent lower than they were this time last year, which could be a normal winter seasonal effect but it could also be a precursor to values dropping."
The Reserve Bank lending restrictions continued to affect many regions, with slower sales in the first-home buyer sector.
Meanwhile, it has been predicted the Reserve Bank could raise interest rates again when it makes its next official cash rate announcement next week.