Things are looking rosy for Tauranga's property market, with Auckland's surging house prices creating a wealth of demand in the Bay of Plenty.

That's according to one Tauranga realtor who says an even balance of supply and demand has the region reaping the benefits of Auckland prices, reaching a new high of $750,023 during January.

The January average asking price in Tauranga was $486,990. Photo: File.

According to market analysis by Real Estate NZthe rise, which is a 2.4 per cent increase on the previous record of $732,240 set last June, drove the national average asking price to a new high of $498,471 - a slight increase on the previous record of $497,840 set in November.

The January average asking price in Tauranga was $486,990, up 7.5 per cent on last month. This is the second largest increase behind the Central North Island's 13.1 per cent.

Nationwide the average asking prices is $498,471, an increase of 3.7 per cent.

New Tauranga property listings for January compared to 12 months ago sit at 642, a 1.4 per cent increase. Nationally there were 9536 new property listings, a 2.9 per cent increase.

Realty Service Group chief executive Ross Stanway says despite house price increases year-on-year in Tauranga and the Mount sitting at about five per cent, a 'significant” level of volume growth is producing a 'good healthy” market.

Ross believes the area is well placed in terms of the supply of homes, particularly new homes starting to come on stream in subdivisions such as Papamoa East, The Lakes and Omokoroa driven by some well-founded confidence amongst known housing developers.

He says: 'I think we are in good shape here in terms of the supply and demand and its inevitable the regions, particularly Waikato and Bay of plenty, are benefitting and it is a benefit from the Auckland demand.

'But I wouldn't see that as a major factor in any price increases to date.”

Ross says despite prices continuing to rise there is no cause for alarm in terms of people being shut out of the market.

'I think there is still opportunity here in that the biggest volume increases are occurring in those mid-price ranges from 350,000 to high 500,000, that's where the volume market is,” adds Ross.

'There is still good buying available in the $350,000 to $450,000 range. Interest rates have moved downward so there is still some opportunity for first home buyers.”

Real Estate NZ chief executive Brendon Skipper says while January traditionally attracts more new listings than December, last month was particularly active with the strongest start to the year for some time.

He believes this bodes well for the first quarter of 2015, as February and March are usually some of the busiest months of the year for new listings.

Despite the increase in new listings, overall inventory of all available housing stock for sale in New Zealand fell in January to its lowest level since April 2007. The long-term national average is 36 weeks, however in January inventory fell to 21.4 weeks of stock.