Wellington house prices have soared by more than a fifth in the last year, easily beating Auckland.
A queue forms for an open home viewing at Leeds Street apartments in Wellington. Photo: RNZ / Michael Cropp
But the country's biggest city remains the most expensive, with three quarters of Auckland's areas worth more than $900,000 - prompting one youth lobby group to complain it is all but impossible to afford a house there.
House price gains are slowing nationwide, with QV's latest figures showing the growth in prices eased to 11.1 percent in the year to April, compared with 12.9 percent in the year to March.
Previous hotspots like Auckland, Tauranga and Queenstown have come off the boil.
But prices, in some cases, remain at a high simmer.
Rotorua tops the list of fastest growing property prices with house values soaring nearly 28 percent over the last 12 months, Queenstown prices grew 23.7 percent, while Wellington jumped by 21.2 percent.
In the capital, more than 170 groups recently viewed an inner-city apartment that was expected to go for a third more than its rateable value of $290,000.
Wellington real estate agent Nicki Cruickshank said there were so few listings in the capital that when houses go up for sale, they were snapped up quickly.
"There never seems to be enough stock in Wellington," she said.
"If you want to be in the city you have to pay a little bit more or you have to move out. Obviously the Kapiti Coast and the Hutt [Valley] have gone up because of that push out effect.
"There's never enough good houses in the city, particularly family houses," she said.
Property information company Corelogic's head of research Jono Ingerson said the Wellington market was being propelled by similar forces as those that pushed up prices in Auckland.
He said Wellington was feeling the effect of New Zealanders not going to Australia, and not enough homes were being built in the capital.
There were half the number of houses on the market in Wellington now compared to what was there a year ago, Mr Ingerson said.
But Wellington mayor Justin Lester said that was an issue being worked on, with a spike in housing consents over the past 12 months.
"From a traditional average of about 800, that's moved up to about 1300 over the period of six months, so we're hoping we'll get close to 2000 over the course of the year, which would be a record for Wellington."
Property developer Kurt Gibbons and Tommy's real estate agent Nicki Cruickshank looking at a brochure for a 17-townhouse development, which they expect to sell out within two weeks. Photo: RNZ / Michael Cropp
In Auckland, price growth is at its slowest since 2014.
QV national spokesperson Andrea Rush said tighter lending restrictions on investors were starting to bite.
"Some of those entry level investors have been hard hit by the 40 percent deposit requirement and that's taken them out of the market, first home buyers in a lot of places around New Zealand... are not having to so much with those entry-level investors."
Harcourts chief executive Chris Kennedy said it remained an expensive market.
"The first home buyer is required to front with 20 percent [in Auckland], and when you're looking at an average sale price of a million dollars or thereabouts, then that becomes somewhat difficult for the first home buyer," he said. "It becomes somewhat difficult for an investor to front with $400,000."
Meanwhile, Generation Zero's Auckland director, Leroy Beckett, said while the slight slowing in price was welcome, it was still unaffordable for those trying to get a foothold on the property market.
"It isn't going to be a quick fix, we're not going to find a silver bullet to solve the housing market in Auckland. It's going to be a lot of legislation, a lot of work from a lot of people over a long period of time," he said.
Analysts were picking there was still plenty of momentum in the housing market, particularly in Auckland, fuelled by a rising population.
And with the supply of new housing failing to keep pace, robust price growth was expected to remain the norm.