Whanganui is close to recording its first million-dollar suburb.
According to the latest One Roof property report, the average property value for Westmere is now $977,000 - an increase of $252,000 on the average for September 2020.
One Roof editor Owen Vaughan said that equates to a growth rate of 34.8 per cent over the past year.
"Whanganui is now a hair's breadth away from recording its first $1m suburb," he said.
"Brunswick won't be far off joining Westmere in that club. Its average property value jumped $244,000 to $963,000 in the 12 months to September 15."
Vaughan said things had begun to decelerate, however, and there had been significant drop-offs in growth over the last three months to September.
"Growth has slowed to 1.9 per cent in the three months to September 15, down from 11.12 per cent in the previous three months."
The number of Whanganui suburbs where you could buy a home for less than $500,000 has also shrunk over the past year.
"Of Whanganui's 31 suburbs, just 10 have an average property value of less than $500,000, down from 19 in September 2020," said Vaughn.
"And nine suburbs have an average property value that's more than last September's highest point - $734,000."
Property Brokers Whanganui manager Ritesh Verma said the high-value properties selling in Westmere and Brunswick were usually lifestyle blocks.
"They are usually one-hectare properties with very nice houses so it's not surprising to see them at the high end.
"The most significant thing we have seen over the last year is that our sales numbers have decreased. In July 2020, we sold 92 properties and in July this year we sold 56."
Listings are still moving quickly he said, there are just fewer available.
Verma had also noticed some changes in buyer behaviour - especially investors affected by the new interest deduction rules that were introduced by the Government in March.
"Where they could previously expect a 10 per cent return, they can now expect five.
"First-home buyers are now lowering their expectations because they need bigger deposits. Previously a lot of first-home buyers wanted what their parents have now. They expected to buy something that ticked all their boxes.
"Their parents' first homes would have been modest and they worked their way up. This generation is now starting to go back to the old school way of doing things and accepting that their first homes might not be all they want them to be."
Verma said there is quite a bit of movement in suburbs where average valuations are still below $500,000.
"Central Whanganui, Castlecliff and Whanganui East are popular, and we recently sold a property in Anzac Parade for over $700,000," he said.
"Whanganui East has always been a busy market and there are some lovely properties there."
Bayleys Whanganui co-owner John Bartley said he had also seen a lack of supply at a time when Whanganui is becoming an increasingly desirable location.
"We have interested buyers in Auckland and Australia wanting to come home or relocate here but there are barriers with Covid-19, as well as a supply shortage.
"And of course there are willing vendors who can't find other properties they would like to buy."
Bartley said the rapid increase in property values is an indication of how desirable Whanganui had become.
Bayleys recently sold a Whanganui lifestyle property for $2m.
"Spring is always one of our busiest times and we bounced out of lockdown to a fast pace," he said.
"We just need more listings."
While overall growth for Whanganui slowed in the three months to September, three suburbs had seen increases in average values during that period.
Fordell was up 4.2 per cent to $761,000, Matahiwi also increased by 4.2 per cent to an average value of $274,000 and St Johns Hill was up by 3.9 per cent to $715,000.
Despite rising values, Whanganui is still one of the cheapest New Zealand coastal towns to buy a house, with an overall average property value of $561,000.