The pace of gains in New Zealand's residential property market in the first three months of this year slowed down, reflecting easing values in the month of March, according to government valuer Quotable Value.

National property values rose 0.5 per cent in the three months ended March 31, slowing from the 1.1 per cent gain over the rolling three-month period through February, QV said. Values are 3 per cent higher than a year ago, and are 3 per cent below the market peak in late 2007.

"The marginal drop in values last month follows a year of slight month-on-month increases," research director Jonno Ingerson said in a statement. "It is too early to say if the drop in the latest month represents a change in direction for the market."

New Zealand's property market has been recovering after households got wary about taking on new debt after the 2008 global financial crisis and local property bubble. However, Auckland real estate agent Barfoot & Thompson said it had its busiest month in five years in March, signalling a pick-up in activity,if not prices.


Ingerson said the increasing number of transactions has been "bolstered by first-home buyers having enough confidence to enter the market, while some existing home owners are now ready to make a move they may have been delaying for several years."

Still, a lack of listings has kept a lid on the volume of sales, especially in Auckland, Christchurch and Wellington, he said.

The issue of housing affordability was raised yesterday after the Productivity Commission released its final report into the issue, and highlighted local government attempts to strictly apply urban limits have limited access to affordable property.

The QV figures show Auckland values rose 0.8 per cent in the three-month period with an average sale price of $529,508, and were up an annual 5 per cent.

Hamilton and Tauranga property values have been steady for several months, and are respectively up 1.2 per cent and 1.3 per cent on the year. The average sale price over the three months ended March 31 was $332,597 and $391,569 respectively.

Wellington's average sale price in the quarter was $437,705, and property values were up 0.2 per cent compared to the same time a year earlier.

Christchurch property values rose 1.1 per cent in the quarter and were up 4.1 per cent on an annual basis. The average sale price in the quarter was $388,629.

Dunedin property values rose 0.2 per cent in the rolling three-month period, for an average sale price of $272,137. The city's property values were up 2.6 per cent year-on-year.