Average house prices in Tauranga have cracked the $1 million dollar mark for the first time, whilst across the wider Bay of Plenty property prices are also at a record high.

That is according to the latest QV House Price Index and TradeMe Property Price Index respectively.

The QV HPI shows that house prices in Tauranga have increased by an average 10.2 per cent over the past three months and 27.8 per cent over the last 12 to post a new record-high average of $1,021,141.

Those figures make Tauranga one of New Zealand's hottest cities currently for property value growth.

Of the major centres, Tauranga takes over from Wellington as the top performer in quarterly value growth, up from 7.8 per cent last month. Wellington remains close behind at 10 per cent quarterly growth, down from 10.8 per cent in April.

Despite this, QV property consultant Derek Turnwald says there was growing evidence of declining investor interest.

'In the past, investors have taken 3-4 months to react to major policy changes that impact upon them. So investor attitudes are likely to be clearer by late winter or early spring time,” he explains.

For the first time since July last year the QV HPI has shown a reduction in quarterly value growth from the previous month. The average value increased 8.8 per cent nationally over the past three-month period to the end of May, down slightly from the 8.9 per cent quarterly growth we saw in April, with the national average value now sitting at $931,928. This represents an increase of 23.7 per cent year-on-year, up from 21.4 per cent last month.

'This small reduction is particularly significant considering the QV House Price Index is a rolling average measure, which includes transactions from some of the most buoyant months earlier in the quarter,” says QV general manager David Nagel.

'We can expect to see further reductions in the rate of growth as the impacts of the recent tax changes for investors and credit availability start to take effect.”

Across the Bay of Plenty region, according to the TradeMe PPI, a new record average high of $830,000 has been met in May.

That figure reflects a national trend, with a 17 per cent increase across the country year-on-year, amounting to a current average property price in New Zealand of $820,950.