Invercargill house values have increased 3.8% in the January quarter, pushing the average home value above $500,000 for the first time, according to the latest QV House Price Index January report.

This figure is 7.2% higher than the same time last year and 0.4% above the previous peak in 2022 the report said.

Nationally, the average house price rose 1.3% in the January quarter with the average home value now $913,567.

Local QV registered valuer Andrew Ronald attributed this resilience to the strong local economy and the relatively low cost of home ownership compared to national standards.

"The strong local economy has been less affected by the current economic headwinds," he said.

Central Otago has also performed well, with a 3.3% overall increase in home values, reflecting the region's appeal and stability.

However Queenstown house prices bucked the trend with a 1.5% dip, which has followed a similar 1.4% dip in the three months ending December 2024.

Nevertheless average house prices in New Zealand's adventure capital still sit at just over $1.8m.

Ronald expected local home values in Southland and Central Otago would continue to grow slowly throughout 2025, despite high interest rates and credit constraints.

"Investors and owner-occupiers are showing increasing interest in the property market but remain cautious overall, while first-home buyers are continuing to make up a larger proportion of the market."

As we move further into 2025, the housing market in Southland and Central Otago will be one to watch, with its unique dynamics and resilience offering a counterpoint to national trends.

QV operations manager James Wilson said that on the surface, 2025 appeared to be continuing the flat trend observed throughout much of 2024.

"This is expected given the economic factors at play, such as high interest rates, credit constraints, a weak labour market, and an oversupply of properties for sale."