The latest QV House Price Index has property values nationwide up by 3.0% year-on-year and by 0.7% in the three months to February, leaving the average national value at $686,050.
Rotorua also saw solid growth of 4.2% in the three months to February, while lower North Island provincial areas, like Manawatu, Masterton and Carterton, are experiencing strong annual growth rates.
The central North Island town of Kawerau has experienced a 28.5% increase to an average house value of $244,000.
Kawerau Mayor Malcolm Campbell told Mike Hosking the future is looking bright for the town which has struggled with high unemployment and social issues in recent times.
"We know things are starting to look up in Kawerau, with industries moving back to the area certainly helping.
"Kawerau has seen house prices move up significantly in the last two years. A lot of them are retirees from the big cities. It's a no brainer for a lot of them, selling up in Auckland and coming down here."
Campbell says the town is in desperate need of more housing to accommodate the expected influx of workers coming to live in Kawerau as jobs start coming back.
"We need more housing, we have a large Chinese company which is going to be starting up a panel wood mill, a milk company and a log processing and container company. That could be up to 1000 jobs for the area.
"We have been at the bottom of the pile for three decades, with the closing of the paper mills. Young people have something to look forward to in the future, where they can work locally. There is certainly a lot of positivity in the area. As long as there is continued growth, things are looking up."