Auckland's housing market is showing more signs of cooling, with values dropping in many suburbs in the past three months.
Photo: RNZ / Cole Eastham-Farrelly
Growth in Auckland eased to just over 0.2 percent from November to January, the latest QV House Price Index shows.
But the average value still sits at more than $1 million.
Average values rose in several regions by up to 10.8 percent since November, while Auckland, Hamilton and Christchurch felt the effects of lending restrictions requiring a 40 percent deposit on investment properties.
QV national spokesperson Andrea Rush said while the main centres had flattened out or dropped, prices in towns within two or three hours' drive from them were taking off.
"People are actually moving there, buying a home and commuting to the city.
"Also, investors would be interested because they can still get more affordable investment properties in these places."
In Kaipara, north of Auckland values rose 6.4 percent in the last three months; Kapiti, near Wellington, was up 5 percent and Mackenzie District out of Queenstown jumped 9.7 percent.
At the same time, Hamilton fell 1.1 percent, Christchurch was down 0.2 percent and Auckland overall eked out a small gain of 0.2 percent.
Ms Rush said lending restrictions dragged down investment property values.
"What we have seen is that kind of investor stock, the rental property stock, that's come back in value in the Aucklands and the Hamiltons.
"Interestingly Tauranga did come back (in value) initially but its now started rising strongly again and that's because its a popular desirable place to live as well," she said.
By contrast, property values in Paeroa, within commuting distance of Auckland, Hamilton and Tauranga, surged 10.8 percent over the past three months and 30.3 percent compared with the same time last year.
Harcourts real estate agent Connie Muir said she had never seen such strong demand.
"We've never before had such a shortage of listings, we certainly have buyers that are looking for properties in this area but we are unable to satisfy them in regards to having the properties available," she said.
Buyers came from Auckland, Hamilton, Tauranga and Rotorua, Mrs Muir said.
Huge demand sent the price of a three bedroom house soaring from about $246,000 a year ago to $335,000 today.
Auckland 'will even out'
Mortgage advisor Bruce Patten said the dip in Auckland values was not a sign the market was turning.
"It won't be a continual slide. It will even out throughout the year but we're certainly expecting very much single digit growth.
"There's still a big shortage (of houses), still a big number of immigrants coming into Auckland particularly, we're still going to face the fact that we haven't enough houses."
Mr Patten warned buyers - including what he calls Mum and Dad investors - to be wary of investing in places like Paeroa just because they're cheap.
"I would caution against investing in areas that you don't know and one horse towns that may have a particular industry that is driving that town, and if that industry was to disappear it could have a major impact."
QV figures showed Wellington values rose 4.2 percent over the last three months, Dunedin increased 5.1 percent and Nelson 5 percent. Nationwide house values rose 1.4 percent to $631,302. The nationwide average value was now 52.4 percent above the previous market peak of late 2007.