Napier home values have risen 18.1 per cent and Hastings 16.3 per cent over the last year, according to the QV House Price Index to the end of October.
The average Napier house value is sitting at $396,000 and in Hastings the average value is $366,083.
"The Hawke's Bay residential property market is still booming and remains in a strong state with most having an optimistic view on it continuing for the short term at least," QV valuer Bevan Pickett said.
"So far the new LVR restrictions for investors do not seem to have had much of an impact on demand here," he said.
He said there remained a shortage of "good quality listings" and demand outstripping supply was "continuing to fuel the market".
"Properties are generally selling under tender and auction methods of sale, in many cases this is fuelling the situation allowing the highest achievable price to be reached."
Out-of-district buyers had "a clear presence" but local purchasers were the most prominent buyer group.
Investors and developers were also a common feature of the market.
"There remains a shortage of rental properties available, which has added to the wider appetite for housing in the market.
"The bulk of volume and demand remains in the entry level with investors and first-home buyers competing strongly."
Ray White managing director Elanor MacDonald said the difference in Napier and Hastings value changes in the QV figures was because of greater sales of lower-priced houses in Hastings.
She said the lift in the Welcome Home Loan scheme price cap for first-home buyers in Hawke's Bay, from $350,000 to $400,000, was also an influence.
The Welcome Home grant, plus the ability to draw on KiwiSaver contributions, resulted in more first-home buyers entering the market.
"The rise in the price cap definitely makes a difference," she said.
Out-of-town buyers were "coming in daily" but investors were not as active.
Black and White Mortgages broker Karrie Stephens said the market was very positive.
She said people should not worry that a house cost tens of thousands of dollars more now than it did six months ago, because it would keep rising in value over the long term.
The ability to access KiwiSaver contributions towards a first home purchase was "such a good opportunity".
"I have only had one application declined all year," she said.
"If they have their KiwiSaver going and they have income, they are pretty much guaranteed they will be able to buy a home."
She said the Napier City Council Parklands sub-division had opened up more opportunities for buyers further up the property ladder.
"There is a shortage out there but if you want a home you can definitely find one."
She said a first-home buyer client purchased in Maraenui three years ago with a no-deposit mortgage at an above-market interest rate of 8 per cent.
"They paid $180,000 for it and it just sold for $312,000.
"Now, with all that equity, they can get a normal mortgage at 4 per cent.
"Three years ago it was very scary for them, but it has paid dividends."
Mr Pickett cautioned some people who were predicting a fall.
"Many homeowners have perceived it as a good time to sell and re-enter the market later after it has slowed, however they are now getting left behind by the market and face getting back on to the ladder with limited, expensive options available to them."
Nationwide, residential property values for October increased 12.7 per cent over the past year, which is the slowest rate since May.