Queenstown continues to see solid value growth, at a time when most high-value regions across New Zealand are experiencing a slowdown.

The latest QV House Price Index from July shows that Queenstown's values continue to steadily rise, up 3.4 per cent over the past three months on top of annual growth of 7 per cent. The average value is $1,168,728. When compared against the country's other premium areas valued at more than $1 million, Queenstown still ranks No.1.

Despite its steady growth, it's important to note that Queenstown's year-on-year percentage increase is dropping compared to 12 months ago. In July 2017, the rate of value increase year on year was 20 per cent. Like many other parts of New Zealand, Queenstown is currently going through a late cycle growth phase.

This often takes place after a period of sustained value growth, when affordability challenges put the brakes on.

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Queenstown's rental market is also experiencing some significant challenges, with holiday-makers and the regular influx of seasonal ski workers putting pressure on rental prices. As an example, the weekly rent for a one-bedroom studio unit in central Queenstown ranges between a staggering $450 and $550.

The buoyancy of the southern region does buck the trend, when compared to most other high-value regions across New Zealand, which are either seeing higher value property marginally drop in value or remain flat.

This market slowdown is partly due to a drop in investor and possibly overseas buyer activity, as the Reserve Bank's LVR restrictions and other government policies take effect.

These restrictions have, however, presented an opportunity for one cohort of the market. First-home buyers across the country are benefiting from less competition and they remain active in the low-to-mid priced areas.

The Wellington region for example, which has slowed in terms of value growth, continues to see significant first-home buyer activity in comparatively more affordable outer suburbs such as Porirua. As is often the case, market activity in the capital city's high-value suburbs remains quiet during winter.

Now for the million-dollar question, what does all this mean for future values? Generally, the rule is where there is increasing demand we expect higher values over time, provided supply remains constant.

With increased demand for lower value, more affordable properties, it's possible we'll see the "lower" end of the market remain buoyant and experience more pronounced value growth when compared to premium, high values areas.

What is likely is that spring will inject new energy into a subdued market. With listing numbers anticipating to increase and the government's KiwiBuild initiative getting off the ground, it'll be fascinating to see how buyer behaviour adapts.