Property values now 5pc below 2007

Property values continue to lose ground across the country and are now more than 5 per cent below the market peak of 2007.

Quotable Value's September index - calculated from the previous three months' market figures - is still 2 per cent above the same time last year, but the gap is closing.

Values climbed 3.4 per cent in the six months to March this year, but have fallen 1.4 per cent since then, as market sentiment remains cautious.

The average New Zealand sales price in the past three months dropped from $407,900 to $401,968.

Qv.co.nz research director Jonno Ingerson said low numbers of sales continued to be a dominant feature of the market as buyers "held back" to see where the market went.

Some were being cautious in their decision making, while others were unable to find suitable properties, he said.

"Other financially secure vendors are holding out for their desired sale price rather than being tempted by low offers," Ingerson said.

Valuers, particularly those in Auckland Wellington, were reporting a lack of well presented, quality properties on the market.

Those that did come up were selling quickly and for good prices, Ingerson said.

Property values in urban areas seemed to be stabilising, although there was a variation between cities and across the price range, he said.

In the provincial centres values continued to be flat, while house values in rural areas kept sliding, Ingerson said.

Ingerson said the Canterbury earthquake had led to a significant slowdown in the number of house sales in Canterbury, as banks, insurers and potential buyers did due diligence on properties.

"This has slowed down the whole sales process, even those which were under contract prior to the earthquake," he said.

Ingerson said September data did not include figures from Canterbury because the earthquake meant there was insufficient sales data to judge values.

"Looking ahead for the rest of the country, we anticipate that the current trends will continue in the coming months.While the number of new listings is likely to increase through Spring and Summer we don't expect sales volumes to increase dramatically," he said.

Glenda Whitehead of QV Valuations said activity within the Auckland market remained "decidedly dull".

"Overall it seems as though buyers continue to lack urgency, probably based on the wider market consensus that it is a buyer's market."

However some brokers said there had been an increasing number of buyers getting bank approvals, indicating some pent-up activity in the pipeline, she said.

Values in the Auckland area are still 4.3 per cent above the same time last year, but the gap is closing.

In Wellington values have dropped 2.8 per cent sincce April, and are now only 0.3 per cent above the same time last year.

Values in Dunedin have been variable in recent months, but have dropped sinces April and are now only 0.3 per cent above the same time last year.

- NZ HERALD ONLINE