Rotorua house prices have soared this year with more than $400 million of residential real estate sold - although the number of sales is down on 2016.
However experts told the Rotorua Daily Post the market had stabilised and new developments and subdivisions in the city was driving renewed activity and confidence.
Figures from the Real Estate Institute of New Zealand show this year to November there were 1059 sales valued at $407m, compared to 2016 with 1690 sales worth $581.3m.
Meanwhile sales worth more than $1m had also dropped with only six so far this year compared to 25 in 2016.
But the median house price in November had jumped to $350,000, up from $297,000 in November 2016.
LJ Hooker Rotorua principal Malcolm Forsyth said the huge spike of sales in 2016 was a catch-up after seven years of ''pretty ordinary trading''.
But it could not continue and ''that's realism'' as the market began to stabilise this year.
''The consistency started to creep in with the number of sales on a monthly basis 110 to 135 at the start of 2017. But then there was another lull around the election.''
Forsyth was not an advocate for out-of-control house prices and said that while they had climbed he did not expect them to inch up much further. However, finding houses under $300,000 was getting harder.
He was optimistic going into 2018 and said developers were also gaining more confidence in Rotorua.
''Good things are being talked about locally and nationally with the housing market. We have seen more new property come on line which is something that has been missing for a long time.''
The Kawaha Point Villas development was going ahead, he said.
''That is 29 land and building packages so the developer is not only developing but doing all the building. That comes through the confidence from people and politicans ... it needed to happen as Rotorua was being a bit strangled by the lack of building.
''We are in the centre of the best part of New Zealand and everyone around us price-wise is streaks ahead but we are still affordable. Now it's our opportunity.''
Simon Anderson, chief executive of Realty Services which operates Eves and Bayleys, said the whole feel in Rotorua had lifted incredibly.
''It is a good story especially when you drive out to Te Ngae Rd and see the developments going on out there. Overall, Rotorua is in a very positive space.''
He said investor buyers had influenced the market in 2016 and accounted for a lot of sales while it had more sales in the $700,000 to $900,000 bracket this year which would have lifted the median price.
Harcourts Rotorua sales consultant Hielke Oppers said house prices had continued to rise because of supply and demand.
''The problem is we have the buyers but not enough houses.''
But more land was being opened up for subdivisions which was positive, he said.
''There are sections being put together for the latest Baxendale subdivison off Pukehangi Rd. Those titles are not too far out so once people can start building on those sections that will open up more properties.
''The biggest challenge at the moment is to get properties on the market and make more land available. Any new development for Rotorua is positive because we have an inflow of people coming in which means more pressure on the housing market.
''I think that is the reason why the council is taking a more proactive approach to developments and subdivisions as well.''
Top suburb sales
2017: Owhata sold 110, Pukehangi sold 93, Western Heights sold 84
2016: Owhata sold 171, Pukehangi sold 131, Ngongotaha sold 118
- Source REINZ