Rising house values in Rotorua might have homeowners excited about what their properties could sell for but affordability is "a growing problem".
Nearly all properties sold above their original purchase prices in the last quarter of 2020, new data shows.
However, agents say the largest gains were made by sellers who held properties for a long period of time and anyone looking to make a quick buck should look elsewhere.
CoreLogic New Zealand's latest Pain and Gain report showed Rotorua residents who sold their home in the last quarter of 2020 made a median profit of $280,000 per property.
The city's gross profit from resales between October 1 and December 31 was $65,435,767.
The median for Rotorua properties sold at a loss was $103,250, with a gross loss of $206,500.
CoreLogic's senior property economist Kelvin Davidson said the national trend of strong property gain and minimal pain was replicated in all of the main centres in Q4 2020.
Davidson said 99 per cent of resales in Rotorua made a gross profit, with only two sales below the original price.
"In dollar terms, the gains were also strong."
Davidson said Rotorua had seen average values rise solidly in recent months, although he said such gains might not continue.
"Affordability will be a growing problem, and there is a range of other effects about to take hold as well, not just in the Bay of Plenty but nationally.
"These of course include the LVR rules, but also possible restrictions on investor interest-only lending and debt to income caps for loans."
Professionals McDowell Real Estate co-owner Steve Lovegrove said the longer you hold on to a property the more you're going to make out of it.
"A lot of that gain has probably been made over the last five years. We've seen quite significant lifts in the last five years.
"People are getting excited about what they could sell their properties for."
Lovegrove said it was encouraging to know the long-term gain of owning property was still a secure investment.
"But the short-term pain is the amount you have to commit to borrowing to get on to that uphill in terms of prices."
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson said Rotorua had seen some "incredible increases" of capital value on lakefront property.
Anderson said the city's median house price had moved 21 per cent in the past 12 months but the number of sales was well down.
"We haven't seen that big pick up in Rotorua sales."
The longer a property was held, the bigger gains would be achieved, he said, but "everything is relative".
Tremains Rotorua sales manager Megan Davies said holding a property for 30 years would achieve greater results.
"Anyone looking for fast gain should look elsewhere."
Davies said the Rotorua market had gained an average of 17 per cent in the past year and 16.5 per cent in the past five years.
"The exciting news is the 11 per cent rise in the last three months, possibly due to fear of the LVR changing," she said.
"But aside from that, it's slow and steady, and in line with other regions it's actually lower."
Sales volumes were down 25 per cent with prices up just over 20 per cent compared to February last year month-on-month, Davies said.
"This means Rotorua is still very interesting to those who are looking for relatively short-term gains.
"The downside on this is the bright-line tax, which investors and short-term buyers will need to be aware of."
First National principal and Rotorua REINZ spokeswoman Ann Crossley said the last quarter of 2020 was "crazy".
"People have got caught up in the hype. There was certainly a lot of people with FOMO [fear of missing out]."
However, she said there was a feeling that things had quietened down in the past few weeks.
"I don't know whether that was all the uncertainty with Auckland popping in and out of alert levels."
Crossley said people were most likely going to gain money on their property after 30 years.
"The biggest story out of this is even if you buy a property today and you feel like you've overpaid, if you sell it in 30 years the market will correct any blip.
"The only time you'll get caught up in any blip is when you have to sell quickly."