First-home buyers, returning Kiwis and pent-up demand after the Covid-19 lockdown have driven median house prices in Tauranga and Rotorua to record levels.
And some Bay of Plenty real estate agents are predicting demand to continue into spring as long as property listings keep coming on to the market.
The latest Real Estate Institute of New Zealand's latest figures show Tauranga's median house price have reached a record $745,000 and Rotorua's climbed above half-a-million dollars at $510,000.
The two cities also topped the list for the most houses sold in August - Tauranga 247 and Rotorua 101.
REINZ regional director Neville Falconer said that, for the region as a whole, the median house price jumped 11 per cent year-on-year to $665,000 and the number of sales rose 7.3 per cent to 513 - the highest sales count in August since 2016.
The days to sell were the lowest since 2016 at 37 and the region also reached its lowest level of total inventory since records began (1144).
However, Falconer said vendors' price expectations had increased compared with this time last year, likely due to the lack of listings on the market.
"There are still reports that finance approvals from banks are taking longer than usual as they continue to be cautious with lending.
"It will be interesting to see how the market continues to perform over the coming months as we head into the election and into the end of the year."
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said he was not surprised by the lift in median house prices.
Anderson believed most of the Bay's 11 per cent gain had been in the last quarter following post-Covid-19 demand.
"Don't forget these are traditionally winter months too. The trend is exciting," he said.
"But in New Zealand when there are downturns, real estate leads the charge in terms of confidence."
The challenge was the amount of stock coming on to the market "because there is no shortage of buyers".
Oliver Road Estate Agents' Jason Eves and Cam Winter said the city's new record median house price reflected the activity in the Bay's property market.
"We have continued to be extremely busy with buyers and sales since the nationwide lockdown ended.
"New listing activity is now also really starting to pick up, which is not unusual this time of year."
Looking forward to spring, the pair anticipated the remainder of 2020 to be busy.
"We are predicting that the coming months will be some of the busiest we've ever seen in the top end of Tauranga's real estate market."
Tauranga Harcourts managing director Simon Martin said numbers were well up on last year.
"The demand is strong and there is an increase in the number of properties coming to the market."
Martin said the demand for property was across the board, including interest from first-home buyers.
He spoke recently to a young couple who had been saving money for a trip overseas but instead invested in their first home.
"They wouldn't have been doing that if it wasn't because of Covid."
General manager of Tremains Bay of Plenty and Waikato, Anton Jones, said the record median house price was fuelled by pent-up demand post-lockdown and low-interest rates.
Jones said people were also putting travel on hold and instead investing in property.
"There are also a lot of first-home buyers looking at property."
But the challenge was being able to keep a good number of listings, he said.
First National principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley said the record median was "not surprising".
"There was still quite strong demand from first-home buyers and investors," she said.
"We are noticing we have got returning people from offshore, people moving from Auckland, as well as local demand."
But Crossley said that, to get 101 sales, her team had to write about 200 contracts.
"So for us, the market has been really busy," she said. "Some of that has been reluctance from the banks and a change in people's circumstances from people who were pre-approved before but now can't get it."
Harcourts Rotorua sales manager Colville Barbour said the new median house price was not a surprise given the strong demand and increase in prices.
"The 101 sales are a further indication of the strong demand for housing in the city."
Barbour said all sectors of the market were active, particularly with first-home buyers and investors.
"The spring market is shaping up to be a cracker. The demand is still very strong and there is a shortage of stock, which will keep the pressure on prices," he said.
"Interest rates continue to decline adding fuel to the fire."
Professionals McDowell Real Estate co-owner Steve Lovegrove said reaching a record median was good for homeowners and was an 'I told you so' to anyone who predicted the property market to fall.
However, he was concerned about how many people were getting cut out of the market because it was becoming too costly.
"There is a chronic shortage of housing forcing people to pay more for them."
OneRoof editor Owen Vaughan said the figures aligned with OneRoof/Valocity figures, which showed positive growth in the Bay of Plenty.
Vaughan said Tauranga performed well post-lockdown and remained "the best in the Bay" but Rotorua was still "a little bit flat" despite seeing huge growth.
Tremains Rotorua sales manager Megan Davies said that, despite uncertain times, people were still taking the opportunity to invest in property now rather than wait.
"They are taking the plunge."