He said the increasing equity would give some home owners the ability to look at buying rental properties or making the most of low interest rates to replace or buy luxury items.
"People will feel a bit more financially comfortable knowing their properties have increased in value."
Mr Lovegrove said the increase in values showed those outside Rotorua the city was a good place to buy and their money was well invested.
"Confidence will breed confidence."
He believed new rules coming into force in September, which would see investors required to have at least a 40 per cent deposit when buying houses, would be positive for Rotorua.
"I think it will have a positive effect. A 40 per cent deposit on a Rotorua house is a lot cheaper than Auckland or Hamilton."
Ross Stanway, chief executive of Realty Services, which operates Bayleys and Eves, said the year-on-year growth was one of the most significant Rotorua would have seen in many years.
He said the latest figures continued the positive trend Rotorua had seen over recent months but it was likely a new benchmark.
Mr Stanway said both buyers and sellers were winners from the increasing values.
"Sellers will feel the benefits particularly if they've owned their home for some time."
Cleghorn Gillespie Jensen property valuer Sharon Hall said she wasn't at all surprised by the latest increase, with her firm "extremely busy".
She said they were booked up two weeks in advance and the demand was across the board from those buying to people refinancing and those with rentals trying to make the most of the equity.
Ms Hall said they'd yet to see an impact from the new 40 per cent borrowing rules.
"I think it will have some impact, how much we'll just have to wait to see."
Investment adviser Tom Davies, from Craigs Investment Partners, said he believed the increasing house values were good for the economy.
He said people should get personalised advice, but speaking generally with values rising it could create the "wealth effect". However he said people should think before splashing out on new items.
"You might enjoy it but you are buying a depreciating asset.
"I think it is good for the local economy. It will create more spending but I would encourage people to use better times and higher cash flows to consolidate or buy productive assets so they keep creating wealth."
QV national spokeswoman Andrea Rush said nationally values for July had increased 14.1 per cent over the past year.
