Tauranga is still one of New Zealand's leading cities for rapid property market growth at present, despite some predictions that it's slowing.

In fact, Tauranga's average house price is rapidly closing in on $1 million.

At 7.8 per cent growth for the quarter − including three per cent for the month of April − it looks as though the city should reach that mark later this month, reports QV.

As it stands now though, the average price of a home here is currently $992,087.

Although confidence in the Tauranga economy remained strong, local QV property consultant Derek Turnwald advises that a number of factors will still likely slow the city's rampant house price growth in the future.

'With the gradual removal of interest cost deductibility for investors it's highly likely that investor interest will decline now,” he says.

'Agents are receiving less enquiries from New Zealanders living overseas, possibly as a consequence of vaccine rollouts and increased confidence that there is an end in sight to the worst effects of the Covid-19 pandemic.

'Plus there's a sense that FOMO (fear of missing out) is being slowly replaced by a fear of paying too much for a property.”

Following the Reserve Bank's recent announcements, Derek expects the central bank to implement additional controls and policy changes, if recent changes are not effective in cooling the country's overheated property market.

Just over a month has passed since the Government announced measures aimed at dampening the rampant growth of the property market, and yet the latest QV House Price Index data shows the market hit a new high in April.

The average value increased 8.9 per cent nationally over the past three-month period, up from the 7.8 per cent quarterly growth seen in March, with the national average value now sitting at $913,209.

This represents an increase of 21.4 per cent year on year, up from 18.2 per cent last month.

The average value in the Auckland region now sits at $1,306,913, up 8.2 per cent over the last quarter, with annual growth of 19 per cent, up from March's year-on-year growth of 16.1 per cent.

'Of the 16 major urban centres we monitor, all except Napier City and Queenstown Lakes District are showing an increase in quarterly growth compared to last month,” says QV general manager David Nagel.

'However, Napier is still showing the strongest gains in value, followed closely by Hastings, with 14.2 per cent and 14 per cent value growth respectively over the past three months.

'We're hearing a range of anecdotal evidence of investors disappearing from auction rooms and even a decrease in first-home buyer presence. And while less properties may be selling under the hammer, the majority are still being sold at prices that are at least as strong as before the tax announcements were made at the end of March.

'We're starting to see some interesting regional trends emerging, with the strongest value growth occurring in the southernmost regions of the North Island.

'The Hawke's Bay region, Manawatu-Wanganui and also the greater Wellington region are all showing very strong month-on-month value growth with Hawke's Bay leading the pack at 4.9 per cent monthly growth. The two southern regions of Otago and Southland are showing much more conservative monthly growth of just 2.1 per cent and 2.5 per cent respectively,” he says.

'We'll all just be guessing the impacts of the recent tax changes until we get another couple of months of sales data to analyse.

'But there's certainly an expectation that we'll see at least a slowdown in the rate of value growth, with potentially less investors and maybe a few more first-home buyers entering the market over the coming months.”