The property market is continuing to show some momentum, despite some volatility caused by tougher lending rules and higher mortgage rates.
There could be a slowdown but no major downturn in the property market, CoreLogic says. Photo: RNZ / Nate McKinnon
CoreLogic's House Price Index for January showed property values rose 2.1 percent over the month to an average value of $1.02 million.
It was a slight increase on December's 1.9 percent growth rate.
Auckland had the biggest jump in average value, up 3.3 percent in January, to $1.47m.
Hamilton and Tauranga recorded increases of 2.8 percent and 2.4 percent respectively.
Hamilton's average value was at just over $900,000 and Tauranga was at $1.16m.
Despite the growth, CoreLogic said there was mounting evidence that residential property values could slow in the coming months, with some areas more vulnerable than others.
Head of research Nick Goodall said the outbreak of Omicron and the shift to the red traffic light added another layer of uncertainty to the market.
"But with the increased difficulty to secure finance being the lead topic and probably greatest influence over the future of the market right now, the impact of social restrictions is likely to be minimal," he said.
Goodall said the expected slowdown was not expected to become a major downturn.
"Mainly because our economy is still quite strong right now.
"Certainly the labour market is very strong with low unemployment and unless people lose their jobs or a significant proportion of their income, you don't expect them to need to sell their property to get out of the market just because interest rates and mortgage payments have increased."
Despite the growth in the upper North Island, the remaining main centres recorded only marginal increases.
Wellington and Christchurch saw increases of 0.7 percent and 0.8 percent respectively.
Wellington's average property value was at $1.13m and Christchurch grew to $750,000.
Dunedin recorded the slowest growth, up 0.2 percent to $715,000.
CoreLogic said some regional cities recorded monthly falls in prices for January.
The biggest monthly fall was Whanganui, down 1.7 percent to $560,000.
It was followed by Nelson and Queenstown, both seeing a drop of 1.1 percent last month.
"Queenstown was a really interesting one, we actually saw its values drop in December as well.
"It's probably a reflection of the very high average value there where the average property is worth $1.55 million ... with restricted credit that's going to impact the amount that people can borrow," Goodall said.