New Zealand's quicker than expected move down the Covid-19 alert levels has seen house prices hold steady, despite overall growth slowing during the June quarter.

The CoreLogic QV House Price Index rose 1.3 percent in the three months to June, with the average house price rising to $738,018.

In the year to March the average was $728,276.

QV's general manager David Nagel said despite the slight cooling, open homes and auctions continued to be well attended and the market was experiencing good competition, particularly from first home buyers.

"It's looking better than a lot of us thought... the real estate sector's recorded strong interest from vendors with listings close to normal levels for this time of the year.

"Banks are recording good levels of enquiry, so I guess the question is, is this sustainable?"

He said the market's resilience would partly depend on returning New Zealanders feeding buyer and tenant demand.

"That's a lot of people that have to find somewhere to live... and makes up significantly for what will be a significant reduction in normal migration numbers... certainly they're filling the void at the moment."

Keeping interest rates low, reducing unemployment and keeping Covid-19 out of the country would also play a part.

Nagel said June saw year-on-year growth drop slightly to 7.4 percent compared with the previous month which was 7.7 percent.

"So just seeing some flattening... there are variations around the country.

"What we have seen is 13 of the 16 major urban areas that we monitor showing a reduction in value growth from the previous month."

However, he said high demand would keep values from falling too far.

"There's a lot of buyers out there, particularly in that entry-level range. There's a lot of competition between the first home buyers and property investors who are looking to enlarge their portfolio."

He said growth was likely to contract further, with the wage subsidy and many mortgage holidays finishing up before the end of the year.

"I think there will be harder times ahead, but the way that we're heading I don't think there's going to be a huge impact on the property market.

"Maybe something like 5 or 10 percent, but to put that in context most properties in the last 12 months have had a gain of 5 to 10 percent so all we'll do is lose those gains from the last 12 months."