Record low interest rates are starting to be felt in the property market, along with a shortage of listings that are lifting prices.

Photo: RNZ / Richard Tindiller

After a fairly flat start to spring, the latest QV house price index rose 1.4 percent in the three months to the end of October, the annual growth rate ticking up to 2.8 percent compared with a 2.4 percent annual growth rate in September.

The average national house value is now at $697,204.

A lack of supply was one factor helping to drive up prices, according to QV general manager David Nagel.

"Normally this time of year we see a surge of new listings but this year we haven't seen that to the same extent as previous years, and so this competition for the limited number of listings has helped increase prices slightly for the quarter."

Interest rates had fallen in recent months in response to the Reserve Bank's cuts to the Official Cash Rate, and Mr Nagel said that was starting to have an effect.

"That's allowing some new buyers to enter the market creating more competition for limited stock, particularly at that affordable end of the market, where we're seeing congestion with both first home buyers coming into the market as well as investors competing for the same properties."

The main centres had struggled to achieve any real substantial growth, although Dunedin and Wellington remained the exceptions.

Dunedin saw values increase 14.7 percent for the year, and growth of 6 percent across the quarter, which QV attributed to high demand and low supply.

Auckland prices were still in decline on an annual basis, but the rate did recover slightly by 0.6 percent in the past three months.