Tauranga home values rose 2.6 per cent year on year, although they dropped 0.9 per cent over the past three months, according to figures released by QV.

The average value in the city is $700,744.

Meanwhile, the Western Bay of Plenty market rose 5.2 per cent year on year and 1.8 per cent over the past three months.

The average value in the district is now $633,569.

Tauranga property consultant Steven Dunn says the market start is starting to slow down although ‘premium' properties still remain in high demand, as out of town buyers from Auckland seek a change in lifestyle.

'There does appear to be a shortage of listings for mid-range properties, which is a sign that people are holding off selling until after winter,” he says.

'We're also seeing buyers take their time when searching for a property and, in many situations, showing less willingness to negotiate on price during negotiations. Interestingly, we have noticed a good portion of sales take place post auction.

'First home buyers, particularly those priced out of the Auckland market, remain active in the market. As the local economy continues to diversify, job prospects and business opportunities also improve, which appeals to many who seek their first step onto the property ladder.

'The Western Bay of Plenty region is also benefiting from a strong local economy, which is driving steady value growth. Katikati and Te Puke, in particular, is enjoying the benefits coming from a productive Kiwifruit trade.”

QV general manager David Nagel says a drop in sales volumes nationwide is to be expected over the winter months.

'This is typical of this time of year, as many people put off selling their property until the warmer months. Values remain relatively high, as low interest rates, the loosening of the LVR restrictions and the government kick-start packages, such as the KiwiSaver HomeStart grant and savings withdrawal, continue to fuel demand.”

Nationwide residential property values for May increased 6.9 per cent over the past year, while values rose 0.8 per cent over the past three months.

The nationwide average value is now $677,996. When adjusted for inflation, the nationwide annual increase drops slightly to 5.8 per cent.