Rotorua house prices have risen more than 30 per cent over the past year as some buyers look to upgrade and others arrive in the district for a change of lifestyle.
Real Estate Institute of New Zealand (REINZ) figures released today (Wednesday) show the median price of a Rotorua property increased 31 per cent last month on the same month a year ago to $325,000. The median price was up 3.2 per cent on July.
Figures showed 139 Rotorua houses sold this August compared to 155 last August and 138 in July.
Chief executive of Eves and Bayleys, Ross Stanway, said well-marketed, well-presented properties were selling readily in the city.
"There's now probably a shortage of properties coming onto the market for buyers and therefore increased buyer activity on any given property, so prices go up."
Interest in Rotorua had increased among property investors due to its value for money, he said.
"There definitely also is interest in the Rotorua housing market from retirees and people moving there for lifestyle and careers."
Parents were also increasingly stepping into the market to buy a property for their adult children, said Mr Stanway.
He thought more properties would come onto the market this spring given price increases and strong demand.
Mr Stanway said the increased deposit now required by investors of 40 per cent was starting to affect certain types of properties.
"Now that there's probably in general less investor activity that does create a bit of an opportunity for certain types of property for first home buyers, now there's less competition."
Professionals McDowell Real Estate Rotorua principal Steve Lovegrove agreed the new investment rules were having an effect on the Rotorua market.
Sales were slower for low value investment-type properties, he said.
However, first home buyers in the middle of the market had been very active.
There was also an influx of people coming to Rotorua for its lifestyle, said Mr Lovegrove.
"Those people are coming to Rotorua and buying the higher value properties."
He said the average sale price had probably increased because the type of properties selling at the moment were of high value.
Mr Lovegrove said buyers from Rotorua as well as out of town were upgrading their properties.
"People are now deciding it's time to move to that bigger house or perhaps even out of town to a lifestyle property."
Mr Lovegrove said more stock would come on board this spring.
"In August we saw over 200 new properties publicly listed for sale in Rotorua which was a big number, I believe, compared to the past," he said.
"As the stock and the choices come and people get used to the new rules, I think we'll see the buyers come back into the market place over the next six weeks."
Rotorua REINZ spokeswoman and Rotorua First National principal Ann Crossley was also hoping for the usual spring increase in listings.
"There's certainly enough buyers out there."
She thought the lift in prices would continue for a little longer.
Ms Crossley said there was a positive vibe in Rotorua at the moment reflected in its housing market.
Median house prices and volumes sold in Rotorua
----------------August 2016-----July 2016-----August 2015