The latest monthly QV House Price Index shows nationwide residential property values for May increased 9.7 per cent over the past year which is the slowest annual rate in two years.

Values rose by 0.4 per cent over the past three months and the nationwide average value is now $634,018 which is 53 per cent above the previous market peak of late 2007.

When adjusted for inflation the nationwide annual increase drops slightly to 7.4 per cent and values are now 27.8 per cent above the 2007 peak.

Tauranga values rose at a faster quarterly rate in May than during April up by 1.3 per cent over the past three months and 15.4 per cent year on year. Values here are now 41.9 per cent higher than the previous peak of 2007. The average value in the city is $683,012.

Meanwhile, Western Bay of Plenty values have increased 14.6 per cent year on year and 3.5 per cent over the past three months. The average value in the district has now topped $600,000 to reach $602,059.

'Activity in the investor market in Tauranga is now at more normalised levels,” says QV homevalue Tauranga registered valuer David Hume.

'Demand for Mount Maunganui based properties remains strong as does demand for other high-end properties in the city and region.

'There is a shortage of large family homes on full sites and a number of new subdivisions around Tauranga are continuing to be developed, with a trend of smaller lot sizes with sections under 400 square metres now becoming more common.

'The Western Bay of Plenty market is showing steady growth although not at the frantic levels seen throughout 2016.”

Residential property values across the Auckland Region increased 9.3 per cent year on year which is the slowest annual rate of growth seen since November 2014. Quarterly value growth remains flat, rising just 0.1 per cent over the past three months.

The average value for the Auckland Region is now $1,044,561 and values are now on average 91.1 per cent higher than the previous peak of 2007. When adjusted for inflation values rose seven per cent over the past year and are 44 per cent above the 2007 peak.