New Zealand's housing market value grew by 0.4% year-on-year in August, driven by strong house price performance in Southland, according to the REINZ House Price Index (HPI) released on Tuesday.

The country's largest city, Auckland, recorded an unchanged HPI value compared with last year. While outside Auckland, the HPI rose by 0.7%.

Southland showed the highest percentage increase over the last 12 months. Meanwhile, Gisborne/Hawke's Bay and Canterbury ranked second and third, respectively.

"The importance of the HPI is evident in the Canterbury region this month, where the median sale price tells a different story to the HPI," said Lizzy Ryley, chief executive at REINZ.

Canterbury had a 4% jump in median sales price in the month. Despite the increase, it indicates market's performance as "middle-of-the-road" for the long term, meaning it received short-term gain from the median sales price.

However, the HPI data showed Canterbury had the third-best annual performance of all regions, a climb of 1.9%. This underscores the real long-term growth in Canterbury's property values is better than the media price alone shows, the firm added.