However, with the market still 13% below the 2007 price peak, when including inflation, caution still abounds for buyers, listings are tight and prices in many provincial centres remain flat.
Quotable Value data for July shows the relatively strong 4.6% gain over the past year was mainly attributable to Auckland and Christchurch, QV research director Jonno Ingerson said in a statement yesterday.
"There are initial hints in this latest data that values may be levelling in Tauranga and Dunedin after increasing for the past few months, while values in Wellington remain flat," Mr Ingerson said.
"Across most of the main centres, listings remain relatively tight, leading to less choice for buyers," he said.
QV Dunedin valuer Tim Gibson said values were being driven by an under-supply of listings, and the majority of buyers were owner-occupiers, although there was evidence of some investors in the market.
Mr Ingerson said first-home buyers were also active, spurred by low mortgage interest rates.
"This is starting to encourage property investors and small developers back into the market, although investors are now careful to ensure their purchases return a decent yield, rather than relying on capital gain," he said.
