Home values in Tauranga city have gone up a massive 22.3 per cent since February last year, according to QV.
In the last three months alone, values in the city have increased 7.4 per cent. The average value in the city is now $565,547.
Western Bay of Plenty home values also continued to accelerate rising 6.9 per cent over the past three months and 13.4 per cent year on year. The average value in the district is now $484,340.
... Everyone is now starting to ask the question: 'How long can this period of rapid house price increases be sustained?'
QV homevalue Tauranga registered valuer David Hume said, "the Bay of Plenty market continues to show no signs of slowing, with demand for properties far outstripping supply.
"The way the top end of the market is continuing to strengthen, characterised by the building activity along Marine Parade at present and reported levels of enquiry from agents active along this strip."
Read more: 'Outrageous' rental market forces families to live in bush
Mr Hume said well located Mount Maunganui properties were setting new benchmarks.
"The recent sale of a renovated three-bedroom 1950's Bungalow on a 309 square metre section for $905,000 at auction earlier this month is a good example of this.
"Previously less desirable areas of Mount Maunganui are also undergoing a real period of gentrification with a number of properties along Maunganui Road south of Golf Road being renovated in the past 12 months.
"Given the similarities to the peak of the 2006 - 2007 property market and a reported levelling off in the Auckland, everyone is now starting to ask the question: 'How long can this period of rapid house price increases be sustained?'"