Median house prices have risen in Tauranga by 17 per cent in the year to October 2015, while Rotorua has seen a massive 51 per cent increase.

The volume of houses sold in each city has fallen over the same period.

The median price in Tauranga is now $550,000, although it jumps to $650,000 for Mount and Papamoa residents. In Rotorua the median house price is now $371,750.

In Tauranga, there were 348 houses sold in October 2015, compared with 240 in the same month this year.

Likewise, in Rotorua there were 159 houses sold in October of last year, but only 110 in the same month of 2016.

REINZ Regional Director Philip Searle says the market is adjusting to new regulations and lending conditions.

"There are certainly lower numbers of investors in the market and something of a decline in first home buyer numbers.

'We're also seeing the market adjust to the new LVR rules and tighter lending conditions from banks. Inventory levels remain low across the region with a significant decline in the number of properties for sale over the past 12 months."

The national media house price is now $510,000, although excluding Auckland the price drops to $400,175.