Rotorua property values have edged higher but remain well off their 2007 market peak.
However, a rise in the median sales price, driven by more higher-end Rotorua properties being sold, is making realtors confident of a good year ahead.
Rotorua property values are up 1.7 per cent year-on-year but still down 14 per cent from 2007.
Rotorua REINZ spokesman Ian McDowell said January's figures were skewed as one Rotorua real estate firm hadn't submitted its December figures on time so they were included with January's.
"December was a bit low and January's a bit higher than it should have been."
January was typically a quiet month and despite the skewed figures, last month had been better than usual, Mr McDowell said.
A rise in properties selling at the higher end of the market had also lifted the median sale price, he said.
Three lakeside sales were recorded, ranging from $920,000 to $1,550,000.
REINZ figures show Rotorua's median sale price last month was $265,500, up $35,500 from the same time last year.
Sixty properties sold in the city last month.
Nationally, the median sales price dropped from December's record of $389,000 to $370,000 last month.
But January's median was up 4.3 per cent year-on-year, according to the latest Real Estate Institute of New Zealand (REINZ) Residential Market Report.
REINZ chief executive Helen O'Sullivan said the housing market was highly seasonal.
"Prices and volumes tend to ease from their year end levels in January, as marketing campaigns for many properties in the upper price bracket don't begin until the latter half of the month."
Meanwhile, the average national residential property value has edged 2.6 per cent above the previous market peak of late 2007, according to new figures from QV.
The latest QV property value index shows residential values nationwide continued to climb in January. Values were up 1.5 per cent over the past three months and 6.2 per cent over the past year.
QV.co.nz research director Jonno Ingerson said it had been a relatively strong start to the year for the property market, carrying on from the increased activity seen in late 2012.
"There has been plenty of buyer enquiry and sales activity throughout January at a time when people are usually still in holiday mode.
"The increase in nationwide values is no longer solely being driven by Auckland and Canterbury. Over the last month or two, values have also begun rising again in most of the other main cities and provincial centres."
While regional values were not rising at the same speed as Auckland and Canterbury, an increase in confidence was signalled across most of the country, Mr Ingerson said.
Values in most provincial regions increased by only 1 to 1.5 per cent over the past three months - the exceptions being Rotorua (down 1.7 per cent) and Queenstown Lakes (down 0.6 per cent).
Meanwhile, Westpac announced new interest rate cuts on Monday to its fixed mortgage rates - prompting suggestions of a renewed interest rate battle between major banks.
Westpac has reduced its one-year rate from 5.25 per cent to 4.89 per cent, its three-year rate from 5.90 per cent to 5.39 per cent, and its five-year rate from 5.99 per cent to 5.75 per cent. Late last month, ASB cut three of its fixed home loan rates by 0.15 per cent.
Current average property values:
- Rotorua - $267,154, 1.7 per cent year-on-year increase, 14 per cent decrease from the market's 2007 peak.
- Nationally - $426,452, up 6.2 per cent year-on-year and up 2.6 per cent from 2007 peak.