The housing market's renewed strength has continued but may face a mixed outlook in the months ahead.

Photo: 123rf

The latest figures from Quotable Value show house values in all 16 major cities rose for the third month in a row.

Nationally, the average value increased 5.3 percent in the year to February with the average house price rising to $722,475.

QV general manager David Nagel said the market remained driven by the usual issue of too few houses to satisfy demand.

"As a consequence, we're seeing more buyers from across the property spectrum competing for limited stock which is forcing prices to rise."

He said Auckland in particular had picked up significantly, rising 1.8 percent over the last quarter, and by 1.2 percent on the year before, with the average price $1.06 million.

However, the strongest annual growth was in Dunedin with 18.1 percent, while Wellington was the strongest in the past three months, gaining up 5.4 percent for an annual rise of 10.8 percent.

Nagel said the market was being driven equally by first home buyers and property investors, and the upward pressure on prices was likely to continue even as the summer peak eases.

However, he cautioned the emergence of the Covid-19 virus may have varying impacts on the market.

"Apprehension around Covid-19 and the impacts this might have on the economy are unlikely to be felt in the property market in the short term, but could have impacts in the months ahead," Nagel said.

"Locations dependent on tourism are likely to be first to feel the pinch," he said.

"[But] if we see a reduction in the OCR [official cash rate] by the Reserve Bank in response to the Covid-19 outbreak, then this could actually stimulate the property market further in the short term, depending on the extent of interest rate reductions that are passed onto borrowers."