Latest house-value figures for Rotorua suggest a more stable and sustainable market, according to one local real estate agent.
QV figures for February show the average value of a Rotorua house is now $417,653. That's up 8 per cent from 12 months ago and an increase of 1.9 per cent over the past three months.
Harcourts Rotorua sales consultant Hielke Oppers said in 2015, 2016 and 2017 prices increased between 20 and 25 per cent year-on-year.
"That was never going to be sustainable for more than two or three years, even with things tapering down a bit at the end of 2017.
"The real estate market moves in cycles, and it appears we are going into a period of sustainable growth of maybe between 5 and 15 per cent year-on-year."
Oppers said sustainable growth was more in line with inflation and income adjustments.
"I see it as being back to normal for a period after a few years playing catch-up. It's a market working itself out."
Oppers said while it was still a sellers' market, there was more of a balance between buying and selling.
"While Rotorua still has a shortage of stock, I also think people are taking a little more time, doing a little more homework and ensuring a few more boxes are ticked on their wish lists before buying a property.
"They're waiting for the right property to come onto the market."
Professionals McDowell Real Estate co-owner Steve Lovegrove described the market as strong, consistent and reliable.
"It's certainly not the boom and bust of two or three years ago," Lovegrove said.
He said to see Rotorua ahead of national figures was "good enough for me". Nationally residential property values for February increased 6.5 per cent over the past year and 1.2 per cent over the past three months.
"For too many years Rotorua was behind the eight ball but following our big leap forward, it's good to see prices are continuing to increase.
"It reflects our belief that 2018 will be a good year to buy and sell a house in Rotorua."
Lovegrove said there was still evidence of strong buyer activity, particularly in the first- and second-home buyers bracket.
"This is because there are still out-of-town people relocating to Rotorua so people with smaller houses are confident of selling and buying something bigger."
He described investor activity as modest.
Ann Crossley, First National Rotorua principal and Real Estate Industry of New Zealand district forum leader, said the QV figures were not unexpected.
"Many of the drivers in the Rotorua market have not changed where they have in other regions," Crossley said. "We've been talking about supply and demand for some time and there is still a shortage in Rotorua. Our supply and demand is not going to change overnight which paints a positive picture for people wanting to sell."