New Zealand residential property values continued to rise in January, with strong growth in regional towns close to main centres like Auckland, Wellington and Queenstown, with property set to keep attracting foreign buyers.

The average value of a New Zealand home rose 13.5 per cent to $631,302 in January compared the same month a year earlier, data from state-owned valuer Quotable Value showed.

Record migration and low interest rates have bolstered the country’s housing market, prompting the central bank to tighten up lending rules to reduce the risk to the nation’s financial stability. New restrictions on lending to property investors with high loan-to-value ratios came into play in October last year.

“It’s possible rising mortgage interest rates and the new LVR rules will continue to constrain the rate of value growth during 2017,” said QV’s national spokeswoman Andrea Rush.

“However, this will be balanced by continued record high net migration and a lack of housing supply particularly in Auckland. As well as the fact New Zealand property can be bought freehold and has fewer taxes on property compared with many other countries, meaning it remains a highly attractive investment to foreign buyers.”

Growth in Auckland house values increased at a 12.8 per cent annual pace in January, and 0.2 per cent on a quarterly basis, taking the average value for the Auckland region to $1.05 million. While the rate of growth is slowing, values are still 91.7 per cent higher than the previous peak of 2007.

Wellington regional house values increased 20.6 per cent year on year to $582,322. Some 30 per cent of all sales in the capital are to first home buyers, and the local market is likely to remain strong in the year ahead said QV.

In other urban centres, Christchurch rose 2.8 per cent to $494,539, Dunedin gained 15.5 per cent to 359,055, and Hamilton values rose 18.6 per cent on the year to $531,337.

Rush said QV had seen strong value growth in centres within two and three hours’ drive of main centres where prices have gained recently.

Kaipara District, north of Auckland, has seen values jump 25.9 per cent in the past year, while Hauraki District house values have risen 30.3 per cent in the past year. People priced out of the Wellington market have bought on the Kapiti Coast, Horowhenua and the South Wairarapa, and the South Island’s Mackenzie District has seen a 26.9 per cent gain driven by buyers priced out of Queenstown and Wanaka.

Tauranga values rose 20.7 per cent to $672,752 and Nelson values gained 16.4 per cent to $508,343. The only place where house prices declined in the year was Buller, on the West Coast of the South Island.