The New Zealand property market activity started the year "cautiously," with national median property values down 0.3% over the three months to January, taking values nearly 18% below the 2022 peak, despite improved affordability, lower mortgage rates, and a strengthening economy, Cotality NZ said in its February Monthly Housing Chart Pack released Wednesday.

Activity is expected to gradually increase, with overall upward trends in sales.

Markets such as Dunedin and Invercargill displayed resilience in January while Auckland and Wellington continued to underperform, the report said.

First home buyers' market share slipped in January to over 26% from more than 28% in the fourth quarter, but the number of deals occurring remained strong, according to Cotality NZ Chief Property Economist Kelvin Davidson.

Meanwhile, the rental market has softened due to a sharp decrease in net migration and a high availability of rental properties.

Bonds figures from the Ministry of Business, Innovation, and Employment showed in the three months to December the median national rent was 0.8% lower than the same period a year prior.