New Zealand's residential property values grew at a faster annual pace in January as a shortage of houses for sale in Auckland continued to fan the flames of a hot property market.

National property values rose 5.7 percent in the year ended Jan. 31, accelerating from a pace of 4.9 percent in December, according to state-owned valuer Quotable Value. Auckland, the country's biggest city, spurred the national pace higher, with property values rising an annual 12 percent, speeding up from the 10 percent pace a month earlier.

"Following a big month of sales in December there remains a shortage of properties listed for sale and this is continuing to put pressure on values and also on buyers, particularly in Auckland and Hamilton where many who are keen to buy cannot find a suitable property," spokeswoman Andrea Rush said in a statement. "Interest rates have come down again and there have been suggestions a possible lowering of the official cash rate this year could make borrowing even more affordable."

The Reserve Bank last week dropped its bias towards hiking the key rate as consumer inflation remains relatively subdued, and governor Graeme Wheeler indicated the next move could be lower depending on the economic data.

The Auckland property market has been a headache for New Zealand's Reserve Bank as prices continue to climb with rising net migration driving demand, and a lack of supply after several years of under-investment in the wake of the finance company collapse in the latter half of the 2000s when the country's last property bubble burst.

QV Auckland valuer James Wilson said there was a "severe shortage" of listings in Auckland, with reports that potential sellers were putting off listing properties until they had another house lined up.

The valuer said other main cities and a number of provincial centres were also starting to show "moderate increases" in value.

Property values in Wellington rose 0.8 percent on an annual basis, slowing from the 1.4 percent pace in December, while Christchurch values increased 3.4 percent in the year through January, just ahead of the 3.2 percent pace in December.

Christchurch registered valuer Daryl Taggart said the extra supply of homes in Christchurch was easing the pressure caused by a lack of housing following the 2010 and 2011 earthquakes, and values were increasing at the same pace they were 12 to 18 months ago.

Dunedin property values rose 1.4 percent in the year ended Jan. 31, accelerating from the 0.7 percent annual pace in December.