With mortgage rates close to their peak, a property research firm is confident it is only a matter of time before house prices start to rise again.
CoreLogic's latest report shows the property downturn may be in its final stages as the pace of declines petered out in some cities while others recorded slight increases.
New Zealand's average property values fell 0.2 per cent in August compared to an 8.7 per cent annual fall.
Chief property economist Kelvin Davidson says some previously weak markets are showing growth.
Property values in August edged up on the North Shore of Auckland by 0.5 per cent, in Manukau by 0.5 per cent and in Franklin by 1.4 per cent.
In Hawke's Bay, Hastings recorded a 1.1 per cent monthly rise in values.
Wellington City's values registered a 0.1 per cent monthly rise with the Kāpiti Coast's up 0.5 per cent and Upper Hutt's lifting 0.4 per cent.
In the South Island values rose in Christchurch and Queenstown had a 0.2 per cent rise, and Invercargill a 0.6 per cent increase for the month of August.
"Although values have continued to edge lower nationally, the floor is likely to be near, with many of the key fundamental drivers now turning around," says Kelvin.
"It's notable that mortgage rates are likely to now be close to their peak, although further small changes can't be ruled out as global markets, and hence wholesale financing costs, remain a little jittery.
"On top of that, migration has significantly boosted property demand, and labour markets remain robust. We're also now starting to see the impact of the loosening in the loan-to-value ratio rules from June 1 flow through to more low-deposit lending for both owner-occupiers and investors with a 35-40 percent deposit, who were previously locked out."
Meanwhile, Kelvin sees positives in National's tax policy to help with investment in the housing market.
If elected, the return of overseas buyers could boost demand, while changes to the bright-line test would flow through.
"The softened foreign buyer rules could also boost demand and prices, although probably more so in local markets than across New Zealand as a whole," he says.
"In Queenstown, for example, about 10 per cent of properties are valued at $2 million plus, and we know it's already more popular with foreign buyers, who could potentially exacerbate the shortages of stock at 'affordable' prices that already exist."
Meanwhile, the NZ Property Report from website realestate.co.nz shows the national average asking price is trending up.