Home values in Tauranga City have continued the upward trend seen over the past few months, rising 7.7 per cent year-on-year and three per cent over the past three months.

The latest monthly QV House Price Index shows values in the Western Bay of Plenty have also risen by 5.9 per cent since July last year and 3.3 per cent since May.

Photo: File.

QV homevalue Tauranga registered valuer David Hume says investors from Auckland continue to be very active in the market.

'Homes in affordable parts of the city are being snapped up by out-of-town investors looking for good yields,” says David.

'There are reports of Aucklanders making offers over email and homes being bought unseen and without market valuation or building reports.”

He adds that demand in regional towns like Te Puke also continues to grow as first home buyers, priced out of the rising Tauranga market, look further afield for homes that are still in an achievable price bracket.

Nationwide, residential property values for July have increased 10.1 per cent over the past year, which is the fastest annual rate since 2007.

Values rose 4.1 per cent over the past three months and are now 27.4 per cent above the previous market peak of late 2007.

When adjusted for inflation, the nationwide annual increase drops slightly to 9.9 per cent and values are now 8.8 per cent above the 2007 peak.

QV National Spokesperson Andrea Rush says they are now seeing a definite upward swing in market activity in the upper North Island.

This is especially evident in Tauranga, Hamilton, Whangarei, and the Franklin, Hauraki and Waikato Districts.

'There's also been increased interest from Auckland investors in the Wellington and Dunedin markets,” says Andrea.

'While parts of the Wellington, Christchurch and Dunedin markets are showing some moderate increases, other areas of these markets are flat or down slightly.

'Sales volumes have been tracking down since March, which is part of the normal seasonal downturn and also a result of a lower number of homes being listed for sale during winter.”

With net migration high, Andrea believes there are now incentives for new migrants to move to areas outside of Auckland.

'So this, coupled with record low interest rates, is likely to see continued upward pressure on home values as we move towards spring,” she adds.