Four Rotorua suburbs are among the top 10 leading the way when it comes to rising property values, figures have revealed.
QV Quarterly Property Report figures released yesterday show
Hillcrest, Utuhina, Western Heights and Glenholme are among those with the fastest growing values in North Island regions.
In Hillcrest, values rose 8.8 per cent in the last quarter, followed by a 6.6 per cent rise in Utuhina, a 5.9 per cent rise in Western Heights and a 3.8 per cent rise in Glenholme.
The average value of a Rotorua house is now $426,458, up 2.2 per cent in the last three months.
First National principal Ann Crossley said a 2.2 per cent rise wasn't significant but the rise in value in Hillcrest, Utuhina and Western Heights reflected interest from first-home buyers and investors.
"First-home buyers can buy up to $400,000 generally and investors spend around $300,000 to $350,000 and that absorbs those three suburbs," Crossley said.
"These three areas have the biggest changes and that's a reflection of where the demand is."
The figures also show Fordlands has the third cheapest houses in North Island regions but values there dropped 1.9 per cent in the last quarter.
Crossley said that was not reflective of the suburb, which had experienced large growth in the last few years.
"It may not be that the price has gone down, just nothing is available."
Harcourts principal Glenn Austin and Professionals McDowell Real Estate co-owner Steve Lovegrove both said it was likely the growth in both house values and prices could continue.
"With multiple purchasers showing interest in most properties we bring to the market and the supply being at its lowest levels in over a decade, I believe we will continue to see prices rise for some time yet," Austin said.
"What we are experiencing is the new normal marketplace."
He said there had been big increases in house values over the past few years and there was always demand for good, well presented properties.
Lovegrove said as long as there were employment opportunities, housing demand, and strong urban growth, prices would increase.
"If supply continues to be restrictive and attractiveness of Rotorua continues to move forward we'll see prices increase because basic demand and supply is going to mean that," he said.
"If development opens up and supply of new houses catches up we'll see stability of values."
Lovegrove said there were a lot of first-home buyers still in the market and Utuhina, Hillcrest, and Western Heights were "good first rung of the property ladder areas".
"There are a lot of properties for someone with an eye for a do-up or renovation. These opportunities definitely sit in those suburbs."
Simon Anderson, chief executive of Realty Services which operates Eves and Bayleys, said the rise in value was exciting news for Rotorua, but it wasn't surprising.
"There's been significant growth in a quarter ... It's pretty encouraging for the market, it also indicates yet again the shortage of listings," he said.
"People are still seeing value in these areas of Rotorua."
James Alexander, a Ray White salesman agreed and said there was a lot of confidence in the city.
Alexander said Hillcrest was a suburb that "shouted value".
"Hillcrest has always been really affordable, you're not overpaying and it's a safe suburb, close to schools and close to town as well. It shouts value and it services most family needs."
According to data from property website OneRoof, the bulk of the residents in Hillcrest and Utuhina are professionals and mangers in the $50,000-plus household income brackets.
Western Heights has a high percentage of family-friendly housing stock and there is a perception that property there is within reach for first-home buyers.
Growth has also been driven by the suburb's proximity to the CBD.
A OneRoof spokesman said the median price in Western Heights had grown by 121.5 per cent in three years.