New home loan lending restrictions are yet to kick into the property market as Tauranga City houses prices remain steady at 0.7 per cent above the same time last year.

Quotable Value's latest monthly figures show the slight rise in property prices for October, along with a 1.2 per cent increase in the last three months.

New figures show a slight rise in Tauranga City property prices.

In stark contrast, national values have increased 8.9 per cent in the last 12 months and 2.7 per cent in the last three months. National values are also sitting up 10.4 per cent since the 2007 market peak change.

When adjusted for inflation the nationwide annual increase drops slightly to 7.4 per cent and values remain below the 2007 peak by 4.8 per cent.

The average current value for a Tauranga property is $435,776, this is $21,536 below the national average of $457,312. Since the 2007 market peak the city's values have dropped 9.5 per cent.

Quotable Value research director Jonno Ingerson says the current nationwide value increases continue to be largely driven by Auckland and Canterbury while the rest of the main centres are increasing at a slower rate.

In contrast, many of the provincial and rural areas have declined in value.

"The recently introduced LVR caps have the potential to have a considerable impact on the market. By limiting lending to buyers with a low deposit this will cause those people to reconsider their options.

'Some will choose to hold off and save more, some will find other sources of money to boost their deposit, and others will lower their price expectations.”

He says it will take some months before any evidence of this becomes clear.

"The impact of the LVR caps will be particularly felt by first home buyers. If a significant number of these first home buyers drop out of the market then volume and values will be affected."

He believes in Auckland and Canterbury in particular, where there is high demand for property, the impact may be felt less and if some first home buyers decide to drop out, there will still be other willing buyers.

'The lower number of first home buyers also offers opportunities for property investors. First home buyers are often driven by emotion and a desire to get into the property market. As a result they may pay more for a particular property than investors who are considering more whether the investment stacks up for a particular sale price.

"Outside of Auckland and Canterbury, and particularly in the provincial areas where demand is lower, the LVR caps may have a larger impact. The removal of first home buyers will leave a gap in the market that may not be filled and so prices would decrease further."