House prices in Tauranga went up significantly yet again in May, according to the latest CoreLogic House Price Index (HPI).

Of the six major urban areas in New Zealand, Tauranga has the highest percentage rise across May as average prices approach the $1 million mark.

House prices in Tauranga have risen 5.1 per cent over May, compared to a 3.7 per cent rise in Hamilton, next on the list.

The average house price in Tauranga now sits at $968,342, up from $922,000 in April.

Over the past quarter, prices have climbed 10.6 per cent and over the year 22.2 per cent, with the average $1 million threshold being broken looking like an increasing inevitability.

However, across the nation, figures from last month are hinting at a slowdown in the market rate.

The HPI highlights that nationwide values have risen by a further 2.2 per cent, a reduction on a 3.1 per cent growth rate across April.

'In the last few weeks both the Government and RBNZ have released house price forecasts with expectations of a significant reduction in growth over the coming months,” says CoreLogic head of research, Nick Goodall.

'The CoreLogic HPI, which analyses a rolling three months of sales data, provides some evidence of this, while analysis of CoreLogic preliminary sales data goes a step further, illustrating the most recent sales are not performing at the same level as those earlier in the year.

'This reflects the impact of both the tightened loan-to-value ratio restrictions, imposed by the RBNZ, as well as the March 23 housing policy announcement from the Government, phasing out the ability for property investors to deduct their interest expenses from their end-of-year tax returns.

'While these changes have caused some investors to sit back and take stock of their portfolio, it appears this pull-back in demand has been mostly made up for by other investors, likely with less debt, and owner-occupiers who had previously missed out while competing in a very heated market.”