The summer property season is in full swing, with large numbers of homes changing hands in the Bay of Plenty and a new record median price.
But first-home buyers need not despair, as the prices of cheaper houses are staying lower because investors have been forced out of the market.
The latest figures from the Real Estate Institute show a big jump in the number of properties sold in Tauranga, with November's 163 well up on October's 128, but behind the 202 sold in November last year.
The figures also show a new record median price for Tauranga of $590,000 in November. This was up from $550,000 the previous month and 31 per cent higher than the $450,000 figure a year earlier.
Real estate agents said this did not mean all house prices had risen by 31 per cent in a year, as the median average was skewed by the fact there had been lots of sales at the more expensive end of the market compared with the bottom of the market.
The bottom of the market was sluggish after new loan-to-value ratio rules stopped many investors from buying cheap rental properties because they needed 40 per cent deposits.
Eves and Bayleys Real Estate chief executive Ross Stanway said the number of listings started to jump in September, and was "very strong" in October and November.
There had been "a real upsurge" in market activity for homes priced above $700,000, Mr Stanway said, but sales in the $450,000 to $550,000 bracket had dropped off in the past few months because of the loan-to-value ratio rules.
"This can mean that first-home buyers have less competition," Mr Stanway said. "Potentially, the market is more favourable for them."
Tauranga Harcourts managing director Nigel Martin said there were definitely two markets operating in the city. Higher-priced properties were selling faster than last year, but it was a different story at the cheaper end.
He expected to see some upward pressure on prices from the end of this month until after the holidays, when more properties came onto the market.
"We're seeing some good activity," he said. "It looks like December will be very busy for sales."
There have also been strong sales in some rural areas.
PGG Wrightson Real Estate Tauranga-based salesman Stan Robb said similar properties were selling for $600,000 per canopy hectare this time last year. Two years ago, they were around the $450,000 per canopy hectare mark.
Bayleys Country manager Simon Anderson said he had seen a lot of interest in sheep farms, beef farms and well-located dairy farms.
REINZ regional director Philip Searle said Tauranga and Rotorua had experienced a drop in first-home buyers and agreed there was a dip in the number of investors buying rentals. It was unclear whether or not this was due to tougher loan-to-value ratio lending rules or the higher cost of properties.
Median house prices in the wider Bay and Waikato region jumped 20 per cent year-on-year, which was well ahead of the national increase of 13 per cent but behind Central Otago Lakes (32 per cent) and Nelson/Marlborough (24 per cent).
Sales volumes jumped 27 per cent in Tauranga from October to November
The national figure was 13 per cent
The median price has risen 31 per cent in Tauranga since November 2015
Tauranga's new median price is $590,000
Maunganui/Papamoa's median is $671,000, up from $582,000 a year earlier