By 3 News online staff
Nationwide property values for July increased at the fastest annual rate in the last seven years, according to the latest Quotable Value (QV) figures.
Data shows July property values rose 10.1 percent in the past year and 4.1 percent in the last three months.
Values are now 27.4 percent above the previous market peak in 2007.
Auckland values increased 18.8 percent year-on-year, 5.7 percent over the past three months and are now 56.6 percent above the 2007 peak.
Papakura was once a sleepy rural village on the outskirts of south Auckland, and is now at the centre of a property boom, with values rising 22 percent.
Business owner Fay Day says it's "pretty scary".
"It's frightening for the young people and it's just gone crazy."
QV national spokesperson Andrea Rush said there has been a definite upward swing in market activity in the upper North Island.
"This is especially evident in Hamilton, but also in Tauranga, Whangarei, and the Franklin, Hauraki and Waikato districts.
"There's also been increased interest from Auckland investors in the Wellington and Dunedin markets, and while parts of the Wellington, Christchurch and Dunedin markets are showing some moderate increases, other areas of these markets are flat or down slightly."
Sales volumes have been tracking down since March, which is part of the normal seasonal downturn and also the result of a lower number of homes being listed for sale during winter, she says.
"Net migration remains at record highs and there are now incentives for new migrants to move to areas outside of Auckland, so this coupled with record low interest rates is likely to see continued upward pressure on home values as we move towards spring."
When adjusted for inflation, the annual nationwide increase drops to 9.9 percent, values 8.8 percent above the 2007 peak.
Adjusted Auckland values have increased 18.5 percent in the past year and 33.7 percent since 2007.
Property commentator Olly Newland says new tax rules aimed at cooling the market have actually fuelled it.
"It was a big blunder, I'm afraid, by the authorities to announce the new rules coming up [in October], and so we naturally have a rise in prices now as people try to get in first."
Homeowners and those selling their homes in places like Papakura are reaping the rewards.
A three-bedroom house sold for $480,000 on Saturday. That's $155,000 above its CV and $100,000 more than agents would have expected it to fetch a year ago.