The average house value in Tauranga has jumped more than $100,000 year-on-year and now stands at $571,872, new figures show.
The QV House Price Index revealed average values in Tauranga continued to rise in March, increasing 5.5 per cent over the past three months and 22.6 per cent year-on-year.
The average house value in March 2015 was $466,378.
QV homevalue Tauranga registered valuer David Hume said the Tauranga market showed no signs of slowing with a large number of out-of-town buyers.
"Agents are reporting in many instances sale prices are continuing to exceed both their and the vendors' expectations.
"There is a lot of activity in Omokoroa at present with a new 12-lot subdivision at Kayelene Place recently selling out in two weeks at an average sales price of $295,000 for sections ranging from 750-900sq m."
First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said it was "still going silly".
Last week he presented two vendors with multiple offers - one had eight offers and the other seven.
"That was all within one day so that is where the offers on property are ... they were in the $400,000 to $450,000 price bracket." He said that price range was popular for first-home buyers and Auckland investors.
Mr Jones said Omokoroa had also experienced strong growth.
Harcourts Tauranga managing director Simon Martin said demand for property was still high with people moving from all over New Zealand and expats returning home.
March was a particularly strong month for the company in sales volumes and it had seen good activity in the $500,000 to $700,000 range.
The low official cash rate meant people could also afford to pay more for a property ... "they can buy a four-bedroom house instead of a three [bedroom house]".
Eves and Bayleys Real Estate sales and marketing manager Karen Worley said 50 per cent of its sales in March were to local people and "we are starting to see a decrease of Auckland buyers".
People were trading up and there was a real interest in the market, she said.
"We think it is great news ... generally speaking it hasn't filtered through to the top end of the market yet but certainly people are starting to trade up due to the increase in value.
"I think it's a combination of factors, the low interest rates, confidence in the local economy and employment and now they have confidence in the real estate market to do it."
Priority One projects manager Annie Hill said the strong property market was largely as a result of Tauranga being increasingly seen as a location that "has strong competitive advantages for businesses that are based here and a lifestyle that is desired by people with skills and talent".
"This is a great position for us to be in.
"The most important point is that the population growth and desirability for housing is being matched by strong job growth."
Tauranga Property Investors Association president Grant Harris said there was still a shortage of rental properties in Tauranga and opportunities for investors to supply rental property to the market.
"Challenges for investors will continue to include acquiring property at a price that is in accordance with their investment criteria that has potential to provide acceptable returns for that investor."
Western Bay of Plenty home values also soared and QV statistics showed they had climbed by 18.7 per cent year-on-year and the average value in the district was now $497,748.
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Countrywide Te Puke Real Estate manager Russell Doughty said the market was very buoyant and "often we are noticing a property is listed and sold within a week".
Anything generally under $350,000 was going to out-of-town investors and "anything under $400,000 we will sell tomorrow", he said.
The average current value in Tauranga was $571,872 while the average current value in the Western Bay of Plenty was $497,748.