Whisper it quietly, but there's the smell of a rally in Hamilton and it's nothing to do with cars.

After years of stagnation, sales are slowly starting to build in New Zealand's fourth-largest city - in the first fragile sign that parts of provincial North Island may be beginning to move out of the housing doldrums.

We're not talking about furious action, but there's enough in the air to suggest low interest rates are finally feeding beyond the Bombays, although things remain flat in Whangarei and Rotorua and not much better in Tauranga. As the centre data tables in this Property Report show, the smaller towns continue to do it hard.

QV valuer Richard Allen says Hamilton is starting to "tick along quite well" after slow progress working its way out of the troughs that followed the 2007 market peaks.


"Sales volumes are not outstanding but things have picked up over the last three-to-six months and there's been a slight increase in value in most areas," he says.

"It almost seems people have put off making a decision for the last two years or so and now have decided to jump in and do it."

Most interest has been in lower-priced houses, drawing first-home buyers and investors as the city "claws its way back to 2009 values", says Allen. But as elsewhere, demand is lacking in the upper end of the market and prices haven't moved.