Demand for lakeside property has "amplified", leaving some Rotorua agents surprised by what people are willing to pay for waterfront views.
Median sale prices in places like Lake Tarawera skyrocketed nearly 70 per cent in the year to December, putting more value on living by the lakes.
However, agents fear a shortage of lakeside listings and say some people were choosing to upgrade family baches and stay put.
Real Estate Institute of New Zealand data showed the median sales price at Lake Tarawera has jumped 69.5 per cent to $1,400,000 from $826,000 in the year to December 2020.
Prices climbed 63.5 per cent at Lake Rotoma to $426,000 from $260,000 year-on-year and 19.4 per cent to $925,000 from $775,000 at Lake Okareka.
REINZ chief executive Bindi Norwell said properties near the water, particularly those with a view of the water, always tend to be a popular choice for purchasers.
"This trend has amplified over the last 12 months as individuals began spending more time at home throughout lockdown periods, placing more priority on pleasant views and easy access to good walks nearby," she said.
"We can see by the increase in median sales prices, that more value is being placed on those that are selling."
The majority of 2020's top sales were recorded at Lake Tarawera and were sold by Bayleys real estate agent Jenny Donne. That included $3 million for a home on Rangiuru Bay Rd.
"That was a record-breaker for sales out there," she said.
Donne, who specialises in lakeside property, said people were seeing lakeside properties as good investments after being unable to travel.
"The interesting thing with Tarawera and Rotoiti is, people hold those properties for many generations. So when one does come to the market, especially at the moment, the buyers certainly outweigh the sellers.
"I think that's where some of the exceptional prices have come through."
A Lake Tarawera local, Donne said she was getting a few inquiries from people in the United States, Singapore and the United Kingdom who were hoping to return to New Zealand.
"The largest buying pool will be from Tauranga," she said.
"And never underestimate the locals.
"In this last 12 months, I've had more people move around the community either being from inland and buying waterfront or moving from one waterfront property to another.
"That's actually been a lot of my business."
Professionals McDowell Real Estate co-owner Steve Lovegrove said people have become more interested in living at the lakes after being able to explore their own backyard post lockdown.
"People are starting to notice it," he said. "Of course, the price of that property goes under pressure because more and more people want it."
Lovegrove said people were investing in their lakeside properties and renovating family baches to live permanently or selling them to someone who will upgrade the home.
"That's what you're going to see more of out at the lakes."
But what was taking salespeople by surprise was how much people were willing to pay, he said.
"We can be extremely surprised with the buying capacity or financial budget that people seem to have to get those properties.
"There seems to be a pretty strong supply of people coming into the marketplace with the kind of money that we would never have imagined or certainly not two or three years ago.
"There's no shortage of buyer inquiry of properties in that area."
Tremains Rotorua sales manager Megan Davies said living by the lakes had always been popular.
"Over the last year some absentee owners have put their homes on the market and these have been taken up by locals.
"Locals who seek that environment can afford it so they will pay higher prices whereas previously they were often driven out by Auckland buyers.
"I can't say locals bought all the high priced lake properties but certainly they are among them."
Davies said some of their sales in Rotoma and Rotoehu have been on leasehold, making them very affordable for people wanting to get on the property ladder at a lower price.
But she said high-end lake properties were hard to obtain so prices may be elevated.
There was some concern about future sewage works costs and people who have held lakeside property for years will be looking to sell, she said.
"Also there is concern on the renewal of jetty consents and rental of these – again costs that retirees may not afford.
"Vendors have high expectations for their lake homes because they recognise the scarcity and prestige of owning a waterfront property."
Ray White co-owner and principal Anita Martelli said any area by the lakes had been popular but sometimes there wasn't enough stock to service the buyers.
"Some of them have been waiting for a couple of years for the right property to come up.
"Certainly, there's a lot of interest in all of the lakes in Rotorua."
Martelli said generations of people have holidayed by the lakes for years and had decided to buy, but it had been hard to find something because of the stock levels.
She had noticed more people wanting to live by the lakes after discovering the ability to work remotely after lockdown.
"People love Rotorua because of the lakes ... We have people from out of town, Tauranga, Auckland, Gisborne, everywhere wanting to buy in Rotorua at the lakes."
Harcourts Rotorua sales manager Colville Barbour said living near the Rotorua lakes has always been popular and has often resulted in premium prices.
"The lakes are popular with both local residents and as out of towners' holiday homes ...
"The current prices are a reflection of strong demand, which is also prevalent throughout the city."
First National principal and Rotorua REINZ spokeswoman Ann Crossley said there was only so much waterfront property available on the market.
"So, when it comes on the market it creates good demand because there's only so much of it. Obviously, in summer, living by the lakes ramps up a little bit as appealable."