Tauranga city's property market continues to increase but QV figures release today show fewer homes are being snapped up in the Western Bay region.

The QV Residential Price Movement Index showed property values in Tauranga City have increased by 1.2 per cent over the past three months and 5.6 per cent in the past years.

However, values in the Western Bay of Plenty have decreased by 0.6 per cent since April and but are up 3.2 per cent year on year.

QV Registered Valuer Mairi Macdonald said: "Sales volumes in Tauranga are decreasing however values in the city are still increasing slightly."

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"Fewer lower value homes are selling due to the LVR lending restrictions and properties are also taking longer to sell especially those under $350,000."

"However, we are seeing more demand for higher value properties (typically over $500,000) due to out of town buyers and there is some evidence of investors looking for higher value properties."