While the country in general was enjoying a ``relatively buoyant'' period of economic growth, Westpac industry economist David Norman is cautioning fortunes are dependent on each region capitalising on its present drivers.
"Areas where population growth is strongest are enjoying the biggest economic benefits - more houses are needed, along with more cars, fridges, clothes and food as new households form,'' he said.
While growth was once an Auckland story, Mr Norman said it is far more a Tauranga, Hamilton, Queenstown and Northland story.
"This stimulus also has a flow-on effect as people draw on equity in their homes,'' Mr Norman said.
Tourism was enjoying "an unprecedented boom'' with annual guest nights up almost 18% in three years, he said.
"This is benefiting Otago, predominantly Queenstown and Wanaka, and in Southland, mostly Fiordland,'' he said.
Other parts of the country such as Wellington, Taranaki, Manawatu-Whanganui, and Northland have not been able to capture their share of the boom in visitors staying overnight in paid accommodation, which meant their share of the tourism pie was shrinking by some economic measures.
Economic indicators for Otago during the past quarter had weakened but Mr Norman said that was was off the back of strong results in earlier quarters.
"Overall, the region is still doing much better than during the last five years,'' he said.
Tourism was growing rapidly around Otago, again led by the Queenstown lakes district and reached more than 1.5 million guest nights for the June quarter in seasonally adjusted terms.
However, he cautioned capacity constraints within the tourism sector were already creating challenges for the region.
"Further growth is expected but we are to some extent determiners of our own destiny in how we provide the capacity for ongoing tourism growth without affecting the visitor experience in the region,'' Mr Norman said.
He said house sales and prices had surged, supported by strong population growth in the Queenstown-Lakes District and low interest rates.
"House price rises have been more limited in Dunedin and other parts of the region,'' he said.
In his general outlook for Otago, Mr Norman said he expected to see some strength continue in house prices.
"The particularly powerful growth in Queenstown lakes district in recent months is unlikely to be sustained but we may see more of a pick-up in Dunedin, for instance,'' he said.
For July, Central Otago prices were up 32% to $660,000, Queenstown rose 38.9% to $910,000, Otago was up 4.9% to $280,000 and Dunedin rose 15.8% to $330,000, the Real Estate Institute of New Zealand said.
"We expect to see a fair bit more construction activity in Queenstown lakes district. House sales are also likely to hold up as long as sufficient stock comes to market,'' he said.
Sales of passenger and commercial vehicles had fallen for the quarter, which implied reduced confidence by households and businesses.
"However, both indicators still remain well above their five-year averages, suggesting that current figures don't imply a serious decline, but simply moderation from recent highs,'' Mr Norman said.
Otago was also seeing some strength from horticulture, especially from summer fruit, and Mr Norman expected to see more positive confidence figures in the months ahead.
