Tauranga's average home value reaches more than $709,000

The average value in the city is $709,339. Photo/File

The average value of Tauranga homes has reached $709,339.

The latest QV House Price Index shows Tauranga home values jumped 3.3 per cent year-on-year and 1.4 per cent in the past three months.

The average home value in the city was now $709,339.

The Western Bay of Plenty market increased 2.5 per cent year-on-year and just 1 per cent in the past three months. The average value in the Western Bay was now $630,254.

QV general manager David Nagel said the arrival of spring had not had a dramatic impact on market values so far.

Nagel said while listings had increased significantly across most areas, quarterly value growth remained modest due to a lack of new market drivers.

"Supply has been constrained which, on top of stable interest rates, is keeping values at their current levels," he said.

But while market activity did not appear dramatic on the surface, Nagel said there was plenty happening behind the scenes.

"Investors and first home buyers continue to transform the makeup of more affordable areas on the outskirts of our city centres," he said.

Nagel said there was a continued increase in demand for different types of property.

"Population growth coupled with affordability constraints is driving demand for semi-detached units and apartments in our main centres," he said.

"With these market changes set to continue, I expect this trend will become increasingly relevant in future years."

The continued slowdown in the rate of value growth in the main centres continued to have a "trickle-down" effect on the regional centres, Nagel said.

"With many smaller provincial areas experiencing a gradual slowdown in growth.

"In saying this, regions that offer more affordable properties or exceptional lifestyle opportunities continue to see strong value growth."

Nagel expected an increase in listings and sales closer to summer, although he was uncertain about how much value growth would be impacted.

"With the current low interest rates set to remain until well into 2020, it's hard to see any dramatic changes to values outside of the usual seasonal fluctuations."