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The residential price indices for January released by Quotable Value New Zealand show that in the southern Dunedin area there had been an annual increase of 9.6%.
Coastal North Shore (9.9%) and Manukau East (9.8%) were the only areas with higher percentage growth in values.
This despite the expected national January jump in property sales failing to eventuate.
Experts are suggesting the Government's potential tax changes could be behind the slowdown.
QV said there were signs of uncertainty in the housing market, mostly due to looming interest rate rises and the recently announced recommendations to the tax working group.
The Victoria University-based group has suggested taxing aspects of the property investment market.
It recommended taxing the unimproved value of property, making changes to the treatment of rental properties, and raising GST from 12.5% to 15%.
The Budget will be delivered on May 20 but New Zealanders are expected to get some clues on the Government's thinking on tax reform tomorrow when Prime Minister John Key sets out a comprehensive policy agenda for the year as Parliament reopens.
QV spokeswoman Glenda Whitehead said home-buyers remained cautious in the face of proposed tax changes, which was just one factor influencing a quiet start to the year.
"There is increasing debate around the likely impact of the options put forward by the tax working group ... and while tax changes implemented will impact, that change will be alongside other market factors such as interest rates, employment security, and bank lending policies prevalent at the time any of those tax changes come into effect."
New Zealand Property Investors' Federation president Martin Evans said investors were resisting purchases until the specifics of the tax reforms were known.
"We're hoping the Government won't touch depreciation or impose a 1% land tax.
But in the meantime, it's all up in the air, and people are holding off buying.
Taxes are just another thing to consider on top of rates, insurance, and mortgage rates."
Ms Whitehead said market activity in January was patchy, and was driven by home owners, not investors.
"While it is normal for sales activity to be at its lowest over the Christmas period, there is usually an increase in listings activity in January leading into the busiest time of the year in February and March.
This January the expected increase appears to be absent."
The average January sale price in southern Dunedin, which takes in the area from Waverley to Green Island including St Kilda and St Clair, was up by more than $3600 from December to $268,302.
In Dunedin overall, the increase in values was 5%, above the national average of 4.4%, and slightly above the 4.9% annual growth reported in December.
The values were still almost 3% below the peak levels of July 2007.
The average sale price in Dunedin in January had increased from $276,875 to $279,101.
Nationally, the average sale price is $409,807.
Within Dunedin, the highest average sale price was in the central/northern city at $290,234, and the lowest in the peninsula coastal area at $252,369, and the Taieri at $283,267.
Real Estate Institute of New Zealand Otago branch president Stephen Johnston said he expected the next month or two to show a clearer direction.
"It's a bit hard to know which way it is going at the moment."
In southern regional areas, Queenstown Lakes was the only one to record a small increase in values (0.5%), with an average sale price of $607,245.
Waitaki values dropped by 5.1% to average $202,673, Central Otago 2.8% to $304,884, and Southland 5.1% to $194,614. - Additional reporting, The New Zealand Herald
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[1] http://www.odt.co.nz/files/story/2010/02/stephen_johnston_1915589244.JPG