"They are frustrated at the moment because the market is so good. It's not ticking along at [a] nice easy pace, it's a big stampede."
The average house and land package was $520,000 to $600,000, compared to $480,000 to $550,000 just 18 months ago.
About 60 per cent of people living in the subdivision were from Auckland.
The complex on Golden Sands Drive that included a doctor's surgery, dentist, pharmacy, physiotherapist and licensed cafe would be completed on November 9, with plans to develop the land opposite within the next two to three years, Mr Day said.
GJ Gardner Homes Tauranga managing director Shane McConnell said their sales figures had doubled and they had built about 40 new homes in Papamoa, but the challenge was having enough land to build on.
"We are sort of waiting for titles to come through and we have a lot that have sold out in advance," he said.
Upward pressure was on pricing and their average house and land package was $530,000 to $570,000 for a three to four bedroom home with two bathrooms and two living areas, he said.
The majority of buyers at Papamoa were Aucklanders who had "a fair amount of money in their pocket to buy a new home" and had money left over in the bank, he said. Venture Developments director Mark Fraser-Jones said sales figures had increased 50 per cent on 2014 and the company had sold more than 120 homes in Tauranga, with 70 at Papamoa this year.
However, there had been an increase in the average cost of house and land packages over the past 12 months, which was "a reflection of developers increasing the cost of sections," he said.
Many of those land and house packages were valued at $450,000 to $500,000 but the company was about to launch a new 4-hectare subdivision in Papamoa East, with prices from $350,000.
"There are 64 houses to be built on lots ranging in size from 300sq m to 370sq m.
"Our clients in this price bracket represent a significant portion of the market."
Classic Builders director Peter Cooney said new construction in the city was at the highest level he had ever seen.
However, challenges included having sufficient sub trades to do the work and being able to provide title sections in a timeframe that reflects demand, he said.
About 20 per cent of their total business was based at Papamoa and "our business has increased substantially, both locally and nationally".
QV national spokeswoman Andrea Rush said the latest E-Valuer statistics showed values at Papamoa Beach had increased 8 per cent on last year.
"The average home value there is now just shy of half a million dollars at $497,650.
"This compares to an average value of $488,100 for the suburb in June so values are up more than 5 per cent over the past three months."
Papamoa offered a great lifestyle at a more affordable priced than Mount Maunganui where the average value was $589,700, she said.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the building activity at Papamoa was starting to provide a "very useful component to the supply side of the housing market."
Tauranga Harcourts general manager Nigel Martin said they were seeing similar trends with 50 per cent local sales and the other half coming from Auckland.
"It's still very sought after and probably purely because of the price range that Papamoa sits in, in comparison to some of the other suburbs in the area."
