Queenstown is following Auckland's "halo'' housing effect, pushing buyers further afield into regional Central Otago areas in search of more affordable housing - but buoying prices in the process.
While data on Otago housing values for the quarter to March shows single-figure percentage gains, the majority of Otago towns' house values have increased anywhere between 10% and more than 30% since the previous housing peak in October 2007.
Quotable Value national spokeswoman Andrea Rush predicts no easing in the Central Otago housing pressure for first-home buyers or renters.
"Entry-level homes have risen by as much as 30% over the past 18 months. For an entry-level home in Queenstown, a buyer is now looking at needing over $700,000,'' she said.
Buyers were now also looking as far out as Kingston, Clyde and Alexandra for more affordable homes, where values were starting to rise also, as in Hawea, Albert Town and other smaller towns.
"There's no easing in prices; in fact, the opposite.
"Residential property values are now accelerating in Queenstown, Wanaka and Arrowtown and the rising home values here are having a halo effect of pushing value increases out to Cromwell, Clyde and Alexandra,'' Ms Rush said.
She said the shortage and high cost of accommodation in Queenstown had a flow-on effect for home values in places like Cromwell and Clyde, which were benefiting from the overflow.
