Australian investors are increasingly active in Hawke's Bay because it is still possible to buy "cashflow positive" properties, where the rent is enough to pay the mortgage, says vice president of Hawke's Bay Property Investors Association Graham Duff.

"It is more easily attainable in Flaxmere than anywhere else but you could still do it in places like Taradale," he said.

Auckland purchases required a 30 per cent deposit under recent rule changes - elsewhere it was 20 per cent - and New Zealand urban centres generally provided a better return than their Australian equivalent.

The QV House Price Index for January shows Napier and Hastings house values are increasingly on the rise.

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Napier house values increased by 3.9 per cent over the past three months and are 6 per cent up on the same period last year. Hastings values increased by 2.9 per cent over the past three months and 8.3 per cent year-on-year.

QV valuer Bevan Pickett said multiple offers on houses for sale was now commonplace.
"The market has picked up where it left off prior to Christmas ... with strong activity and growth in home values in both Napier and Hastings," he said.

November Napier values were 2.4 per cent higher than the previous peak of 2007 and Hastings values 3.9 per cent higher.

"There continues to be a lack of good listings available to purchasers."

Property Brokers agent Jason Whitaker said most out-of-town buyers were from Auckland and Australian buyers were expats or had a connection with the region.

"We don't want it to become a mini Auckland," he said.

Big price hikes invariably came with a big price drop.

"When there is a big drop we become counsellors - it is never much fun when people are losing lots of money or the banks are on their backs."

Auckland home values rose 20 per cent on the QV Index and are 70 per cent higher than the 2007 peak. In January they fell 0.5 per cent.

Nationally values rose 12.6 per cent year-on-year and 0.7 per cent over the past three months.