The number of house sales in Tauranga jumped 38 per cent in 2015, according to new figures, with Aucklanders putting in offers on properties they had not seen.
It has actually gone nuts again ... we have seen a huge amount of Auckland investors and anything under $500,000 is hotly contested.
Median sale prices have also climbed as demand continued to outstrip supply in a market that "has gone nuts", industry leaders said.
Figures from the Real Estate Institute of New Zealand show 3854 properties sold in 2015 compared to 2797 in 2014 while the median sale price reached $475,000 in 2015 up from $417,500 in 2014. Data also revealed sales volumes in December 2015 reached 343 as opposed to 266 in December 2014 - a lift of 29 per cent.
First National Mount Maunganui, Tauranga and Omokoroa owner Anton Jones said the market had hit new levels going into 2016.
"It has actually gone nuts again ... we have seen a huge amount of Auckland investors and anything under $500,000 is hotly contested."
Last week it listed a house on the market and within three days "it had four offers from Aucklanders that had not seen it", Mr Jones said.
Another open home attracted 30 groups of people.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the continuing price increases were particularly evident over the second half of last year and "they are continuing".
He said it would be a challenge going forward to have enough properties to satisfy demand but the situation provided a good level of confidence for potential sellers.
Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said the real estate boom in Auckland had slowed and Tauranga could follow suit.
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"Obviously those ripples go out in time and it filters through to the provinces.
"There may be a lag period for us and I don't know what it might be."
Growth and sustainable growth were two different things, he said.
"I am not too fussed about a slow in prices as long as the volumes remain. Without a doubt we are not meeting demand and that is why prices have done what they have done.
"There is no question in that way the health of the real estate community has existed outside the general economy," Mr Purcell said.
Tauranga Harcourts general manager Nigel Martin said it had more listings coming on to the market and "there is going to be a bigger selection of properties available in the next six weeks".
Its agents were also getting large groups of people through open homes and dealing with multiple offers, he said.
"Now is a good time to sell as there is strong interest from buyers."
Quotable Value Tauranga registered valuer David Hume said the Tauranga market showed good growth throughout 2015 after a number of flat years following the financial crisis in 2008.
But Tauranga Chamber of Commerce chief executive Stan Gregec said the current real estate boom was probably unrealistic and undesirable.
At the end of the day "slow and steady" is probably better than "fast and furious", he said.
Meanwhile Priority One projects manager Annie Hill said the strong real estate volumes were good news for the city.
"It means that people want to move here, and we know that in New Zealand and globally, businesses tend to base themselves where there is a pool of skilled and talented people from which to draw from."
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