The value of house price growth halved across the country's main centres last month, but Quotable Value says it is unclear if this will be a long-term trend or a "blip" which will bounce back.
QV's latest Quartile Index — which tracks the prices of the 25 per cent most and least expensive houses — shows average value growth across upper and lower quartiles in 16 major urban centres it monitors was around 1.7 per cent in May, down from 3.4 per cent and 3.5 per cent respectively in April.
It is the first time average monthly house price value growth in these areas dipped below 2 per cent this calendar year, QV said.
Many of the biggest dips occurred in Marlborough, Wellington city, Hastings and Napier, which QV described as some of the country's hottest residential property markets.
"While it’s certainly promising to see a bit of steam come out of the residential property market, we’ve still got some way to go until you can officially say it’s cooling off. Prices are still going up, by a lot in many places – they just didn’t go up by as much in May as they have in previous months," QV's David Nagel said.
However, looking at its rolling three-month average — which has a larger sample of sales data and often provides smoother trend over time — QV said upper and lower quartile prices in the 16 centres had increased in the three months ending May 31, but were ultimately still down on April.
This was an 8.5 per cent and 8.3 per cent increase respectively — down from 9.3 per cent and 9.6 per cent in April.
It also showed the biggest gains this quarter were at the upper end of the residential property market in Franklin (13.2 per cent), Marlborough (13.1 per cent) and Hastings (12.7 per cent), as well as at the first-home buyer level in Papakura (13 per cent) and Whangārei (12.6 per cent).
"Property owners continue to make significant capital gains up and down the country right now, so any talk of the property market cooling may be a tad premature. We should have a clearer picture next month and the one after that," Nagel added.