Houses in Wellington: The largest cities saw the largest increases in value in the housing market during the last quarter, QV says. Photo: 123RF
House values continue to strengthen, with first time buyers continuing to drive modest price growth.
The latest QV House Price Index shows the value of the average home increased in value by 2.1 percent over the three months to the end of October - a lift on the 0.9 percent quarterly home value increase reported at the end of September.
The national average value was sitting at $907,387, following three consecutive months of modest growth, including last month's 0.9 percent rise.
Values fell in just three of the 16 main urban centres - Whangārei (-0.4 percent), Hamilton (-0.2 percent) and New Plymouth (-2.8 percent).
Larger cities saw some of the biggest increases, with the average home value up in Auckland (+2.7 percent), Wellington (+2.5 percent) and Christchurch (+1.8 percent).
"Interest rates and credit constraints continue to act as a handbrake for the most part, but we are seeing increasing signs of life across much of the country," QV operations manager James Wilson said.
"The property market's recovery has largely been fuelled by first-home buyers in the more affordable areas, but we're also starting to see that recovery spread into our largest urban areas now, up the property ladder and into some of the higher value brackets."
While the overall market remained cautious, he said sentiment was improving.
"Interest in purchasing property has been on an upward trajectory post-election and as we head towards what is typically the peak selling season, with some purchasers looking to get in ahead of any perceived property price increases.
"A little bit of (fear of missing out) is setting in, with the number of new listings on the market not keeping up with demand. This is putting some upward pressure on prices."
However, Wilson did not see a big rebound in house prices given the strength of the economic outlook.
"It will be interesting to see whether some investors might become more active in the coming months, especially now that there's some certainty around a change in government.
"This could increase the competitive pressure on house prices in more affordable areas and places where record migration is driving rapid population growth, but it's still unlikely we'll see a major return of investors while high interest rates and credit constraints remain."