The growth in New Zealand property values is levelling off, as lower Christchurch valuations, low-equity lending restrictions and interest rate hikes weigh on the market.
House values rose at an 8.8 per cent annual pace in March, the slowest annual gain since September when values lifted 8.4 per cent, according to state agency Quotable Value (QV).
Residential values have risen 0.1 per cent in the past three months, down from a 1.8 per cent pace in the three months through February, dented by a 1.5 per cent decline in Christchurch values.
The Reserve Bank of New Zealand imposed loan-to-value mortgage lending restrictions (LVR) in October to cool the market on concern rapidly accelerating house prices in Auckland and Christchurch could lead to an asset price bubble and cause financial instability.
Bank governor Graeme Wheeler started hiking interest rates in March to head off inflation and is expected to raise the rate further in April.
"The LVR speed limits and the Reserve Bank signalling further interest rate hikes is likely to be contributing to a levelling off in the growth of property values in Auckland and for the first time in more than two years we are seeing a decrease in some areas of that market," said QV spokeswoman Andrea Rush.
Values in Auckland increased at a 14.3 annual pace in March, and are up 0.9 per cent over the past three months.
However, values fell in some areas such as Auckland South, which declined 0.5 per cent in the past three months, QV said.
In Wellington, house values rose at a 2.8 per cent annual pace, while Christchurch values increased 8.3 per cent.
Nationwide, values are 12.6 per cent above the previous market peak of late 2007, QV said.