The rate of house price growth is gradually slowing as measures designed to slow the rapid growth begin to take effect.
The CoreLogic House Price Index shows nationwide values rose 1.8 percent in July, which is the same rate of growth recorded in June, but down on levels seen earlier this year.
National average property values increased nearly 25 percent in the 12 months to July, taking the average house price to more than $920,000.
The total value of the all residential property in New Zealand had eclipsed $1.54 trillion.
"The exceptional rate of growth witnessed following the economic recovery after the pandemic-induced lockdown was not sustainable," CoreLogic head of research Nick Goodall said.
He said tax changes, tighter lending rules for property investors and the fact that there was fewer houses to buy was starting to take some of the heat out of the market.
Analysing the HPI on a quarterly basis, value growth nationwide had fallen from 7.2 percent in the three months to June, to 5.9 percent in the July quarter.
"Despite some investors unable or unwilling to remain active in the market, a strong pipeline of equity-rich investors, previously unsuccessful first home buyers and other owner occupiers who remained patient are now taking this opportunity to seize on low interest rates before they lift any further," he said.
A tightening labour market and higher consumer prices pushed inflation beyond the Reserve Bank's target range last month, increasing the likelihood that the RBNZ would begin raising official cash rate at its next monetary policy meeting.
This was likely to dampen demand in the property market because the cost of servicing a mortgage would increase.
"With the market still growing, albeit at a slower pace, this may give the RBNZ a level of comfort to lift the OCR without major concern of it having too negative an effect on values," Goodall said.
Property values continued to grow across all of the main centres, with the biggest monthly rise recorded in both Christchurch and Auckland as they increased by 2.1 percent.
At the other end of the spectrum, Hamilton house prices only lifted by half a percent.
Across other centres, Rotorua saw a 3.3 percent drop in values in July, following a 21 percent increase over the past year.
The Kapiti Coast's property values declined 0.2 percent.