New Zealand property values rose 0.2% in February, the strongest monthly increase since October last year.

Cotality NZ’s Home Value Index shows the national median value reached $806,697 in February.

That is 1.2% lower than a year ago and 17.3% below the early-2022 peak of $975,540.

Hamilton and Dunedin recorded the largest monthly increases at 0.9%, while most other main centres rose between 0.4% and 0.6%.

Auckland’s rise was smaller at 0.1%.

Cotality NZ chief property economist Kelvin Davidson said the latest results could signal a shift, though it remains early.

“With sales activity trending upwards for some time now, mortgage rates down, and the economy showing signs of a pick-up, a re-emergence of modest gains in property values this year would not be a surprise.”

Across Auckland, all sub-markets were flat or slightly higher in February.

Rodney, Waitakere and Auckland City avoided falls, while North Shore, Manukau and Franklin each rose by 0.1%.

Papakura increased by 0.2%, making it the only Auckland sub-market where values are slightly higher than three months earlier.

Davidson said improved affordability in Auckland may support prices over time after recent value declines.

“With affordability conditions better, and as listing numbers continue to fall, a modest lift in Auckland property values over the medium term wouldn’t be a surprise.”

Looking ahead, Davidson said borrowing conditions and interest rate expectations remain a key influence.

“Anyone with large debts will no doubt be pleased to see the Reserve Bank pushing back slightly on the suggestion that the OCR could rise sooner rather than later.”

Activity in the housing market may increase this year, which could reduce the number of listings and place some upward pressure on prices.

Debt-to-income lending limits and the recent rise in housing supply relative to population may restrain stronger price growth.

Davidson said the balanced outlook is still for only modest growth in property values this year.

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