'Next-home buyers' are cashing in on huge amounts of equity and low interest rates in order to upsize their houses amid a cooling but still red-hot housing market.
House price growth has reduced slightly in May, but prices remain well up on this time last year.
The latest data from QV shows the average value increased 8.8 percent over the three months to May, compared with an 8.9 percent lift for the three months to April.
QV general manager David Nagel said the slight reduction was significant, given the Index was a rolling average.
"[It] includes transactions from some of the most buoyant months earlier in the quarter.
"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."
All but four of the 16 centres monitored showed slower quarterly growth.
The regions that continued to rise were Tauranga, Auckland, Hamilton and Whangārei.
"In the Auckland region, the average value now sits at $1,336,800, up 8.4 percent over the last quarter, with annual growth of 21.8 percent, up from April's year-on-year growth of 19 percent," Nagel said.
Growth in Tauranga continued, with the average price now topping $1 million - up 27.8 percent on this time last year.
But, while the market continued to climb, QV property consultant Derek Turnwald said there was growing evidence of investors backing away.
He also said real estate agents had been receiving less inquiries from New Zealanders living overseas.
"Which is a possible consequence of vaccine rollouts and increased confidence that there is an end in sight to the worst effects of the Covid-19 pandemic," he said.
"The Australian economy is gaining momentum again, which may attract Kiwis back over there. US and UK vaccine roll outs are going well and many highly-skilled workers may be attracted to higher salaries in these countries also."
Nagel said first-home buyers were also stepping away from the market as they waited for price growth to slow further.
"What we're seeing now is those buyers that have already got a property but they're thinking we can take advantage of the cheap interest rates, [so] let's upscale the quality of our home or the size of our home to suit a growing family.
"These are the more expensive homes where the next-home buyers are targeting - they've got plenty of equity, they're not affected by the bright line fees or the interest deductibility rules changing.
"So they're out there in the market and that's helping fuel these price increases."