The increase, announced yesterday, means an average residential home in Dunedin was now worth $289,800, up from $277,700 in 2010.
The fastest-growing property values in the city were also found in some of the city's more affordable areas, reflecting increased activity within the first-home buyer market in the last 18 months, QV southern manager Tim Gibson said.
That included Central City North, where average values were up 10.7%, fuelled by demand for student investment properties, council staff said.
It also included Brockville (up 7.8%), Green Island (up 5.2%) and Corstorphine (up 5.1%), Mr Gibson said.
That reflected increased demand for ''lower bracket-valued properties'', fuelled by low interest rates and access to KiwiSaver funds for home deposits, he believed.
''What we've seen is there's been good demand on the residential side for those sort of entry-level properties, for investment and for family purchase.
Dunedin Mayor Dave Cull said the figures were ''overwhelmingly positive'' for the city. It would be a concern if prices were either declining or ''skyrocketing''.
''We seem to have a reasonably steady situation in Dunedin where, on the whole, they are rising steadily ... but not to the extent that they [prices] are rocketing out of people's reach.''
Real Estate Institute of New Zealand regional director Liz Nidd, of Dunedin, said she was still studying the figures, but the activity in Brockville, Green Island and Corstorphine ''doesn't surprise me''.
''It's a huge part of our market. There's a lot of turnover and a lot of pressure on that market,'' she said.
However, she was wary of the QV valuations, saying there were ''always anomalies'' within the valuations, for example ignoring improvements made to houses that did not require consents.
''They often defy a certain level of understanding and reason ... suddenly we get people expecting their property is worth that much more than it was the day before they got the new rateable value.
''It's just not common sense, because the value of the property is relative to the current market,'' she said.
Despite that, the QV revaluations would have a bearing on the general rates bill set by the Dunedin City Council, but not until the 2014-15 year, beginning on July 1 next year, council financial controller Maree Clarke said.
However, the general rate was only part of the picture used by the council to calculate total rates. Other fixed rates charges also applied, she said.
Whether an increase in valuation would have any impact on a property's rates bill would depend on whether the increase was more, or less, than the overall increase in capital value for that property type, she said.
That meant the overall impact on rates bills would vary from property to property, even within the same suburb, she said.
Across the city, land values were also up 2.8%.
Commercial capital values (up 2%), industrial (0.2%) and rural properties (10.3%) had also all increased.
The increase in rural properties reflected ''consistent growth'' in dairy and pastoral properties, Mrs Clarke said.
The revaluations were the latest provided for the council by QV on a three-year cycle, and reflected property values on July 1 this year.
The figures showed the city's total property value was continuing to climb, with 54,799 rateable properties together now worth about $21.4 billion, up from $20.02 billion in 2010 and $19.9 billion in 2007.
However, members of the public had until November 28 to lodge an objection to their property's value.
In 2010, after the last revaluation, 949 were received.
