Tauranga house prices have risen 26.5 per cent in the past year, according to the latest QV figures.
The average value of a house in Tauranga last month was $665,155.
Western Bay of Plenty home values had risen 30.5 per cent in the past year, with the average price in the district now $591,202.
Registered valuer for QV Home Value Tauranga, David Hume, said Tauranga properties in the $700,000 to $1 million price bracket were still showing very good demand, as were the higher value properties in the $1.5m-plus bracket.
"Lifestyle properties are continuing to show good demand as they are perceived as being better value for money in comparison to the strong Tauranga property market."
Tauranga Harcourts franchise managing director, Simon Martin, said cheaper houses were not selling as quickly as they were a few months ago, pushing up the medium house value.
"The cheaper houses are sitting around on the market, and are currently a lot harder to sell."
Mr Martin said the number of listings currently on the market had also fallen but it was a good time for the first home buyers to get into the market, with investors currently pushed out because of LVR restrictions.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said he had noticed a lot of activity in the $800,000 plus sales prices - a swap from three or four months ago where most buyer activity was in the $500,000 to $600,000 range.
Mr Stanway did not think house values would continue to rise at the rate they had been going.
"It is not sustainable or healthy."
Mr Stanway believed the current momentum in the market would continue through the summer.