The nationwide property market recovery is showing signs of faltering in parts of the country but Auckland prices are expected to keep climbing this year despite having reached record highs.
The latest Quotable Value price indices, released yesterday, show residential property values gradually increasing throughout last year and just 3.5 per cent below the 2007 market peak in December.
"For the first few months of 2011 values across New Zealand were stable with rising values in Auckland and Christchurch being balanced by falling values in many other areas," said QV's research director, Jonno Ingerson.
From April, national values began to increase as most of the main centres, besides Wellington, stabilised. By September values were increasing in all main centres and many provincial and rural towns.
But Mr Ingerson said the year ended with "the first signs that this apparently nationwide recovery may be faltering" after prices in places such as Hamilton, Tauranga, Rotorua and Gisborne flattened.
Mr Ingerson said last year's market was characterised by lower than normal sales volumes, despite values increasing, and buyers were "generally acting cautiously".
Low interest rates attracted first-home buyers back into the market.
This increase in activity at the lower end of the market was reflected in the average sales price of $398,411 for properties sold in the last three months of the year.
"Auckland values are likely to increase further, especially given that the population continues to grow, building activity has been weak, and if a lack of new listings of quality properties keeps supply below demand."
Values in Auckland increased by 4.3 per cent last year and ended at the highest level ever - 1.4 per cent above the previous peak of late 2007.
Auckland: Values increased by 4.3 per cent, ending the year at their highest level ever - 1.4 per cent above the 2007 market peak.
Wellington: Ended the year .4 per cent below 2010 and 6.5 per cent below the peak.
Christchurch: Despite the earthquakes ended the year 4.3 per cent up on 2010 and just .9 per cent below 2007.