New Zealand property values rose 4.9 per cent last year, less than half the pace in 2013, as low-equity loan restrictions, rising interest rates, and the uncertainty of a general election reduced sales volumes.

National average property values rose to $488,674 in December 2014 from $466,022 the same month a year earlier, according to state-owned valuer Quotable Value, slowing from 2013’s 10 per cent gain.

Auckland continued to drive the higher property values, rising 9.8 per cent in December 2014 to $761,858, slowing from the 15 per cent rate of growth in 2013, while Christchurch value growth slowed to 3.2 per cent in 2014 from a pace of 13 per cent a year earlier.

“Once the election was over and interest rates rises were put on hold, there was a surge of new listings and activity with the coming of spring and values began to tick upwards again in most of the main centres,” QV spokeswoman Andrea Rush said.

“The return of relatively low interest rates offered by the banks with cash incentives coupled with record migration levels has since led to a strong reacceleration of values in Auckland.”

Property values in Wellington rose 1.4 per cent in 2014, slowing from an increase of 3.1 per cent in 2013, while Dunedin values edged up 0.7 per cent, slowing from a 3.8 per cent pace a year earlier.

QV said a number of provincial centres were hit harder by the central bank’s loan-to-value ratio restrictions, which limited the level of lending banks could make with deposits of less than 20 per cent.

CoreLogic director of research Jonno Ingerson says a lack of listings will likely constrain the market this year, though turnover will probably remain buoyant in the first few months of 2015.

“New listing activity typically picks up from mid-January, but unless there are far more than we saw last year then supply is likely to remain less than demand,” he said.