Rotorua is leading the country in house value increases - with average values skyrocketing 29 per cent in the past 12 months.
The QV House Price Index for February, released this morning , showed the average current value in Rotorua was now $386,810 - up 3.7 per cent in the past three months and 29 per cent in the past 12 months.
Values now sit 31.7 per cent above the 2007 market peak.
Rotorua's annual growth is now in the top quarter of all 75 districts and cities in New Zealand, according to QV homevalue Rotorua registered valuer Michael Power.
The average house value in Whakatane is $390,000, Taupo $428,000 and Tauranga $673,000.
Mr Power said there had been a continuation of the growth over the past two to three years that had spread from Auckland into the regional centres where houses were seen as more affordable.
"The annual growth for Rotorua recorded has been reasonably consistent over the last few months at 25 per cent - 29 per cent and most people are aware of the strong market conditions."
He said interest was across all sectors, but there had been some cooling in the investor market with the recent tighter LVR restrictions.
Speaking generally about the market, Steve Lovegrove, co-owner and principal of Professionals McDowell Real Estate, said he was beginning to see "a gentle come back" from investors.
Mr Lovegrove said the high demand for rentals that was pushing up rental prices and therefore returns was helping lure investors back into the market.
He said they were still seeing strong interest, particularly in well presented and higher end properties.
While Rotorua had been playing catchup it had now "morphed" into a place that was desirable to live and people were seeing the opportunity in the city, he said.
Mr Lovegrove encouraged sellers not to "over expect" on the value of their properties.
LJ Hooker Rotorua principal Malcolm Forsyth said there was still good interest in the market.
"The supply is coming through but to be fair it is not keeping up with demand. We have really good enquiry but don't have stock coming on board at the same rate. That leads to a supply and demand issue, and people are competing for the properties."
Mr Forsyth said interest had ramped up in the past week or two with open homes getting good interest.
Nationally resident property values for February increased 13.5 per cent over the past year, and 1.1 per cent over the past three months.
The average value nationwide is $631,349.
BY THE NUMBERS:
- Average current value $386,810
- 29 per cent increase in 12 months
- A 3.7 increase in three months
- Values now sit 31.7 per cent over 2007 market peak