New Zealand property values rose at a 9.2 per cent annual pace in November, and continue to be driven by a shortage of houses in Auckland and Christchurch, although there appears to be some slowdown in buyer interest, according to state valuer Quotable Value.

Property values in the Auckland area rose 15.2 per cent, ahead of the 14.5 per cent annual pace in October.  In Christchurch, values increased at a 12.4 per cent, up from 11.8 per cent in October.

The national pace accelerated from 8.9 per cent annual growth in October.

Rapidly accelerating house prices in the country’s two biggest cities have raised concern about an asset bubble emerging and prompted the nation’s central bank to introduce restrictions on low-deposit mortgage lending on October 1.

Property market activity normally slows down at Christmas and the impact of the high loan-to-value restrictions (LVR) should become clear by March, QV said on Monday.

“While it is still too early to see any definitive effect on values from the LVR changes, there are signs of changes in the market,” QV research director Jonno Ingerson said in a statement.

“There are reports of fewer potential buyers at open homes, longer marketing periods and fewer auctions selling on the day.”

The Reserve Bank, which is expected to keep interest rates on hold at a record low 2.5 per cent this Thursday, has signalled rates are set to rise next year and further increases are likely should lending limits fail to stem rapidly rising house prices.

Population expansion in Auckland is outpacing housing supply while Christchurch is being rebuilt following a series of earthquakes.

In other major centres, house values in the Wellington area rose at a three per cent annual pace while Hamilton increased 5.5 per cent and Tauranga advanced 3.5 per cent.

Gisborne is leading the provinces in the North Island with an annual increase of 2.9 per cent while in the South Island, Southland prices rose at an annual 4.4 per cent pace.