"Auctions and tenders are becoming more popular as the strength of sale tends towards the vendor and it becomes increasingly difficult to cap an asking price on a home given that values are rising quickly."
Hawke's Bay Property Investors Association vice-president Graham Duff said investors would likely continue buying into the mid and lower segments of the house market.
"Nobody is going to buy an expensive home in this area unless they are looking for long-term capital gain," he said. "Most of the properties our investors own would be middle to lower value."
He said the rising Auckland values meant many house owners were borrowing against their increased house value to invest in the regions.
"The money from Auckland is spilling over and you have out-of-town investors, who probably have the ability to buy because their equity has gone up."
Those areas closest to Auckland have benefited most. Hamilton increased 23.3 per cent year-on-year and Tauranga 22.6 per cent. Since the 2007 property market peak Auckland values have risen 70.4 per cent, compared with Hawke's Bay's 5.8 per cent.
Cashflow positive properties, where the rent covered the mortgage, were becoming rare. Most properties suitable for rental investment received three or four offers. "That was never the case before."
