Maori Hill has become the Dunedin's first half-million-dollar suburb by average value, while towns and suburbs around Queenstown and Wanaka have now pushed beyond $550,000 and Arrowtown to more than $800,000.
Aside from the seven hot spots around Otago, the province's other 20 towns and suburbs have all been making more modest gains over the past couple of years, according to quarterly figures released to the ODT by government agency Quotable Value.
QV is the latest property agency to report anecdotes of Auckland investors eyeing up the South, where rental yields outstrip those available in the North, even though capital gains may be more modest.
QV's registered valuer in Dunedin, Duncan Jack, said the highest percentage of value growth was in the city's more affordable suburbs, reflecting that most of the sales activity and demand was occurring at the lower end of the market.
The best performing suburbs, for the quarter to June, were some of the city's more affordable suburbs such as St Kilda and Mornington, which was indicative of the high level of activity at that lower end of the market.
Maori Hill was now Dunedin's first half million dollar suburb, moving from $497,950 in June to $501,700 for July, he said.
St Clair, while declining 0.3% in value from June, was next highest in the city at $407,200 for July, the sole $400,000+ entry.
''Maori Hill is traditionally one of Dunedin's most popular suburbs and this desirability is due to the suburb's substantial homes, the sought after location and its proximity to good school zones,'' he said.
For the past two years, all the 27 towns and suburbs followed by QV made price gains, from South Dunedin, up 1.7% to $189,250, to Fernhill, which shot up the most at 15.3%, to $553,350.
Of the 27, just five were down on their values since the peak of the market in October 2007: Alexandra ( 0.5%), Cromwell ( 0.2%), Caversham ( 3%), St Kilda ( 0.9%) and South Dunedin ( 2.7%).
QV's national spokeswoman, Andrea Rush, said there was now a critical shortage of affordable housing in the Queenstown market. The average value in Fernhill was the lowest, but at more than $550,000, and the average value in Arrowtown was $812,700.
Two years ago, average values were already above $500,000 for Albert Town, Arrowtown, Frankton, Queenstown and Wanaka, with only Fernhill below, at $479,800.
''We're now seeing significant capital growth in the market as purchasers look to secure properties, and demand is exceeding supply,'' Ms Rush said.
Multiple offers on properties ''were now commonplace'' and vacancies for residential rental properties were ''virtually nil'', leading to increasing rents, she said.
QV was also seeing significant growth in vacant residential land sale prices, and the number of section sales was also up, she said.
With time scale selling restrictions coming into force shortly, there appears to be growing interest among Aucklanders in opting for long term southern ownership, with healthy rental yields while they wait out the minimum two years.
Within the past week, Colliers International and the Real Estate Institute of New Zealand have noted investment interest from beyond Otago's borders. Colliers said 73 first quarter campus rental sales were to Aucklanders (10) and overseas buyers (6).
Mr Jack said North Dunedin showed a 3.3% increase in the three months to June, which could in part be due to increased Auckland interest in the student rental market.
''With good yields becoming harder to find in Auckland, investors are definitely considering the steady demand student rentals offer and the relatively good yields of around 7 to 8% that they can achieve by investing in this market,'' he said.
Ms Rush said the visitor accommodation market was becoming more popular as people from out of town looked to buy holiday homes.
She was starting to see ''some solid value gains'' in Central Otago, particularly in Alexandra, Cromwell and Wanaka, and there was slower, but increasing, activity for higher value properties.
