The average Nelson home is now valued at more than $400,000.
The latest QV figures showing residential property values for last month have the average current value in Nelson at $401,953.
Nelson house values have increased 2.8 per cent over the past year, and 1.1 per cent over the past three months. This means they are now 5 per cent above the previous market peak of late 2007.
Nelson's average value broke through $400,000 in December and was sitting just above that now, said QV Nelson valuer Richard Kolff.
"Up until last year values have been pretty static and last year we saw an increase in values," he said.
The number of sales in Nelson had dropped in the last two months compared with the same time last year, linked to the loan-to-value (LVR) restrictions, and expected mortgage rate increases would inevitably impact on the market, he said.
He described the Nelson housing market as steady. "It's always a popular location, it has population growth, up until now it has been increasing steadily."
Nationally, the latest monthly property value index shows that residential values for January have increased 9.6 per cent over the past year, and 2.2 over the past three months. This means they are now 12.8 per cent above the previous market peak of late 2007.
The Auckland market has increased 14.5 per cent year on year and values are 27.2 per cent above the previous peak.
Jonno Ingerson, QV.co.nz research director, said property value growth had slowed down in the first month of the year. The January index showed that nationwide values increased 0.3 per cent compared to December, while a month earlier the increase was 1.3 per cent. "So while values are still increasing the rate of this increase has slowed considerably."
That pattern was evident across Auckland, and most of the other main centres had also slowed considerably to the point where values were either flat or slightly decreased in the past month, he said.
"While this is the first month that values appear to have slowed, and generally we would wait for subsequent months before claiming a trend, the timing does align to the LVR speed limits. These speed limits have reduced the number of first home buyers active in the market, but perhaps more importantly have led to increased caution amongst buyers."
There was widespread expectation that the LVR speed limits would slow down value increases, at least temporarily. "However we did not expect values in Auckland to slow as they appear to have, given the supply-demand imbalance. We also expected the other parts of the country, particularly provincial and rural areas, to be hit harder by the LVR speed limits, but at this stage this does not appear to be the case.
"The predicted increase in mortgage interest rates in the near future are likely to also slow down values further. This may in fact already be affecting buyer confidence and contributing to the slowing we are seeing."
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