Tauranga's average property value has grown to above $1 million, according to new OneRoof analysis.
A new house price index launched by OneRoof.co.nz showed Tauranga's average property value jumped 6.6 per cent to $1,075,000 from $1,008,000 in the three months to August 31.
The wider Bay of Plenty's property values climbed 5.5 per cent to $945,000.
The index, developed by OneRoof's data partner Valocity in response to the rapid acceleration in house prices over the last 12 months, shows there is still heat in the market.
OneRoof editor Owen Vaughan said under the new value index it was the first time reporting Tauranga's million-dollar average.
"It cracked the million-dollar mark three months ago."
Vaughan said Tauranga recorded one of the steepest value growths this quarter.
"The acceleration and momentum have kept going."
He said there were a lot of high-value sales in beachfront areas but also in areas that were not prime real estate.
"Everyone just wants to tip into Tauranga. That is why the average value is now above a million.
"The city's growth hasn't slowed and in the last six months we've seen double-digit growth per quarter, which is quite exceptional.
"There is a sense Tauranga has got up there with Auckland and Wellington."
Meanwhile, the average house value in New Zealand is close to hitting $1 million, according to the OneRoof index.
Property values across the country grew 5 per cent in the three months to the end of August, pushing the national average property value to $983,000.
Of the regions, Waikato saw the biggest jump in prices over the quarter, with its average property value up 6.1 per cent from $821,000 to $871,000.
Also showing strong growth were Canterbury (up 5.5 per cent to $668,000), Tasman (up 5.3 per cent to $913,000), and Gisborne (up 5.1 per cent to $664,000), along with the Bay of Plenty.
Southland was the weakest performer, recording growth of just 2.6 per cent over the quarter for a new average property value of $472,000.
West Coast remains the cheapest region for real estate, with its average value sitting at $350,000, although a lift in market activity has seen it turn in growth of 4.5 per cent over the quarter.
Auckland and Wellington regions remain the most expensive for property, with quarterly growth of around 4.5 per cent pushing their average property value to $1.395m and $1.037m respectively.
Across the country, investors' share of new mortgage registrations in the three months to the end of August was 24 per cent, down from 27 per cent in the previous quarter, while first-home buyers increased their share slightly from 36 per cent to 39 per cent over the same period.
The figures show that the foot has come off the accelerator for much of the housing market, OneRoof reported. Growth in the last three months, while still high, was significantly down on the previous three-month period.
Nationally, the average property value grew 7.18 per cent in the three months to May 31, as first-home buyers and investors raced to lock in purchases at low interest rates and before new rules around deposit requirements and tax deductions came into force.
The biggest comedowns were in regions where market activity had been exceptionally high. Hawke's Bay's rate of growth dropped from 10.91 per cent in the three months to May 31 to 6.61 per cent this quarter,
While the pace of growth in Manawatu-Whanganui, Marlborough and Wellington fell around 5.5 percentage points between the two periods.
Holding steady were Tasman (-0.82 percentage points), Waikato (- 1.36 points) and Auckland (-1.47 points).
James Wilson, director of valuation at Valocity, said the fact that New Zealand's average property value was just several thousand dollars from hitting the $1m mark showed just how much heat there had been in the market since the end of the first Covid lockdown, not only in the major cities but also in small-town New Zealand.
"Whilst the rate of growth has begun to soften in recent months, value levels are still increasing fuelled by low interest rates and low listing volumes," he said.
"We are beginning to note some different trends around the country. Whilst rates of growth are stalling in many main markets, we have seen strong growth in Waikato, Canterbury and the Bay of Plenty, which can be attributed to the fact that a lot of property in these regions is still affordable compared to prices in Auckland and Wellington.
"Interestingly, we are seeing signs of 'value creep' within such regions, where those seeking more affordable stock are targeting fringe locations as opposed to the main centres. For example, in Waikato much of the growth is from the southern fringe of the region as opposed to Hamilton itself."
The changes in the market can be clearly seen at a territorial authority (TA) level. Of the 72 TAs in New Zealand, just 26 recorded growth of more than 5 per cent over the last three months and 15 showed growth of less than 3 per cent.
In the previous quarter, all but four TAs recorded growth of more than 5 per cent, and 15 recorded growth of more than 10 per cent.
Eighteen TAs saw dramatic shifts in market activity during the two quarters, with the cool-down most notable in Whakatane, Carterton, Manawatu, Kapiti Coast, Napier and Hastings. All six had recorded strong value growth in the three months to May 31, but that growth dropped between seven and 10 percentage points in the three months to August 31.
Also cooling off were Whanganui (down 6.77 points), Rotorua (-6.31 points), Porirua (-6.29 points) and Upper and Lower Hutt (-6.12 points and -5.50 points).
Still hot, however, are Taupo, Queenstown Lakes and Auckland's Franklin region, with growth in each TA hardly changing between the two quarters. In fact, Taupo and Franklin are respectively the number one and number three top-performing TAs for this quarter, with Taupo's average property value up 9.1 per cent to $838,000 and Franklin's up 6.5 per cent to $1.072m.
At the number two spot is Tauranga, where the average property value grew 6.6 per cent over the last three months to $1.075m, on the back of a tight listings environment and strong buyer demand for waterfront properties.
Of the six other major metro housing markets in New Zealand, Christchurch recorded the next highest growth this quarter - its average value was up 5.7 per cent to $673,000 - while Auckland City, Wellington and Queenstown Lakes all saw growth of around 4 per cent.
Falling behind are Dunedin and Hamilton, both of which grew less than 3 per cent this quarter, and less than 5 per cent the previous quarter. Both cities were two of the strongest performers before Covid, and the slowdowns suggest they have felt the impact of the Reserve Bank's LVR changes the most.
Wilson noted that values in the index were higher than those found in other housing market reports because the index was designed to measure what was happening in the market right now, not several months ago.
"The OneRoof-Valocity House Value Index has been designed to be more responsive to rapid changes in market trends and conditions," he said.
"The methodology used allows us to incorporate a wide range of property data sources and ingest sales quickly after they are made."