Mortgage limit effects kick in
House values have risen 9.3 per cent in the past year, figures from the country's state-owned valuation company show.
QV's figures for February show that the national average house value is $468,484, 13 per cent above the previous market peak in late 2007.
Growth in property values had been slowing for two months, with an annual increase of 9.6 per cent in January and 10 per cent in December.
QV spokeswoman Andrea Rush said the Reserve Bank's limits on low-deposit mortgages were having an effect.
"Last month was the very first sign that the steady upward trajectory on the New Zealand, Auckland and Christchurch values over the past couple of years is starting to level off," she said.
"This is a clear indication the LVR [loan-to-value ratio] caps are taking effect and they appear to have led to a reduction in the rate of value growth in the residential property market."
QV said property values in the Auckland region had continued to rise last month, increasing year on year by 14 per cent.
Auckland valuer Bruce Wiggins said prices were being held up by properties with development potential.
"The big thing in Auckland at the moment is land," he said.
"We're starting to see people invest money into attaining land where high-density or development potential exists ahead of the implementation of the city's new unitary plan."
A Castor Bay property sold in February last year for $1.69 million and had reportedly been resold recently for $1.99m in the same condition, he said.
Values in Hamilton grew 5.4 per cent annually, and the Wellington market continued its upward trajectory, with house prices in the region increasing 2.9 per cent on year-ago levels.
Wellington valuer Kerry Buckeridge said there had been a significant increase in the number of properties for sale, "and buyers now have a lot more choice".
Values in the Christchurch were up 11.1 per cent year on year, but valuers noted that the post-earthquake panic that saw buyers paying top dollar was slowing.
QV's figures follow news that turnover at Auckland's biggest real estate agency, Barfoot & Thompson, fell last month.
The firm saw house sales fall a seasonally adjusted 13.2 per cent on the same period a year ago, and although prices were steady, the agency's managing director, Peter Thompson, said he expected only marginal price movements this year.
He said part of the reason for this was the increasing number of new buildings, which was swelling the number of listings.
Westpac economist Michael Gordon said high LVR lending restrictions had "gutted" the cheaper end of the Auckland market and were skewing the average house price upwards.
He predicted house prices would slow from about 10 per cent annual growth to 6.5 per cent this year.
"Our view has long been that the lending restrictions would bite hardest initially as first-home buyers drop out of the market," he said.
"However, over time we expect investors will step into the gap.
"This, combined with a strong lift in inward migration, should help to limit the fallout for house prices in 2014."
- Fairfax Media