Residential property values have slowed just gradually enough this year to avoid eroding values, the Real Estate Institute of New Zealand (REINZ) says.
The national residential property market finished the November year up 6.66 per cent, compared with the annual growth rate a year before of 10 per cent.
Despite the many predictions of decline, the market always enjoyed sufficient demand from buyers and confidence on the part of sellers, REINZ national president Murray Cleland said.
"Various factors influenced the market, including reduced immigration on previous years, rapidly rising new home construction costs and higher mortgage interest rates."
But despite a year of considerably reduced sales volumes, compared with the boom 2003 to 2006 period, values held up.
Gore finished the year with the record for annual percentage price growth, with a 42.6 per cent increase in its median price from $128,000 in November 2006 to $182,500 to November 2007. In second place was Invercargill, up 23.2 per cent from $168,000 to $207,000.
For the whole country, the median rose from $330,000 to $352,000 this year, following three years in which the national median increased by almost $100,000, from $235,000 to $330,000.
Areas such as Auckland, Wellington and some of the sought-after resorts such as Nelson, parts of Hawkes Bay and Central Otago, were early winners.
In the year to November, Southland was the leading region, with its median up from $155,000 to $209,025, an increase of 34.9 per cent, Mr Cleland said.
Then came the Manawatu and Wanganui region, up 9.6 per cent from $208,000 to $228,000, and Central Otago Lakes, also with a 9.6 per cent increase, from $392,500 to $430,000.
The Canterbury and Westland area was fourth at 8.5 per cent, with a median up from $289,500 to $314,000 while Northland was in fifth place with a 7.9 per cent increase, from $285,000 to $307,500.
Following Gore and Invercargill for provincial cities and towns in the year - excluding areas where sales volumes were too low - were Wairarapa, up 25 per cent; West Coast, up 21.3 per cent; North Canterbury, up 21.1 per cent; Timaru, up 15.1 per cent; Tauranga, up 15.4 per cent; Whangarei, up 15 per cent; Wanganui, up 15 per cent; and Palmerston North, up 12.7 per cent.