The residential property market continued to slow in June, and values declined in many areas despite a tiny increase in the average sale price, QV said today.

National property values rose 0.1 percent in the June quarter compared with a year earlier, to an average sale price of $392,436, well below growth of 2.4 percent in May.

That followed a real estate institute report last week showing a 1.4 percent fall in the national median house price to $340,000 for the month of June, and sales at a 16-year low.

QV said Auckland area values fell 1 percent, led by a 2.4 percent decline in Auckland City; Hamilton City values fell 2.5 percent; Christchurch fell 0.2 percent and Dunedin values declined 4.3 percent. Wellington region rose 1.1 percent, slower than the 3.4 percent in May.

"With market activity slowing dramatically, consumer confidence knocked by increasing interest rates, fuel and food prices, we expect the trend of falling property values to continue," said Glenda Whitehead of QV Valuations.

"The traditional upsurge in activity in the spring market may reverse the mood of the winter market, however the issue of home affordability may dampen any resurgence in the market for a while to come."

Property values were now lower than a year earlier in many areas, despite an increase in average sale prices, she said.

Annual growth rates slowed in all main provincial centres, and declined in Gisborne (-3.2 percent), New Plymouth (-3.8 percent), Palmerston North (-1.5 percent), Nelson (-0.1 percent) and Queenstown Lakes (-1.6 percent).

QV calculates its figures over three month periods, comparing data with the corresponding period a year earlier.