December saw a further pick-up in recorded house sales, however this comes from a very low base and mortgage lending remained flat, according to the latest ANZ Property Focus.
House sales volumes from the Real Estate Institute (REINZ) maintained the improvement shown in November, rising 3.9%, and the REINZ House Price Index remained broadly unchanged in seasonally adjusted terms, up 0.2%.
However, these rises come off historically low levels, with residential turnover remaining low in relation to stock and against a year ago (down 11.3%).
"A mood of caution still pervades the housing market, with prices flat lining," ANZ said.
"The market remains caught between conflicting drivers; fixing balance sheets versus a growing gap between demand and supply."
The ANZ Property Gauges, 10 gauges ANZ use to assess the state of the market and to look for signs of emerging trends, reflected this cautious sentiment.
Of the ten gauges, only two showed a moderately positive direction for house prices.
Consents and house sales and supply-demand balance both pointed to house prices either rising or remaining the same, with house sales lifting - albeit from a very low level - and a tick up in demand.
Of the remaining eight gauges the majority, six, were in neutral territory and two pointed to house price falls.
Among the neutral indicators interest rates had shown little change, with only one mortgage provider dropping its one-year fixed rate, mortgagee sales were easing - but again remain historically high - and net migration numbers were thinning again.
Globalisation - relative property price movements between New Zealand, Australia, the UK and US, revealed house price growth is slowing and affordability as a measure of house prices to income was moving in favour of buyers.
Both liquidity and serviceability/indebtedness point to falls in house prices as demand for credit wanes and deleveraging continues.
ANZ said that while the wider economy was recovering, it was from such a low base that "times still won't feel that great."