Photo: RNZ / Nate McKinnon
The CoreLogic House Price Index fell 1 percent in February on the month before, which was the largest drop since October's fall of 1.3 percent.
Each of the main centres saw values drop in February, apart from Christchurch, where values rose by 0.4 percent.
Wellington, Dunedin, and Auckland were the softest of the main centres, with Hamilton and Tauranga seeing smaller falls.
National home values were 8.9 percent down on last year to an average of $944,077, with a nearly 20 percent drop in Wellington and 11 percent drop in Auckland leading the market down.
Corelogic NZ chief property economist Kelvin Davidson said the larger drop in home values was unsurprising and continued the weakening trend that had been in place for the past 12 to 15 months.
Outside the main centres, Davidson said there were divergent trends in property values, with Queenstown seeing a strong 10 percent increase.
"Despite mortgage rates being at or close to a peak, the RBNZ's grim outlook for inflation and the economy more broadly was always going to weigh further on property values," Davidson said.
"February's 50 basis point hike in the official cash rate is also likely to restrain demand."