Property values continued to gradually decline in September, as sales remained low, latest QV figures show.
September values were 5.3 percent below the market peak of late 2007, after having been 5 percent below the peak in August.
The QV residential property index is 2 percent above the level of a year ago, but QV said the gap was closing.
The average sales price for the past three months, which QV considers a less reliable measure of value change than the index, dropped to $401,968 from the $407,900 reported last month.
QV.co.nz research director Jonno Ingerson today said the housing market was experiencing a "very low" level of sales, as had been the case for several months.
"QV valuers, particularly in Auckland and Wellington, are reporting that there is a general lack of well presented, quality properties on the market at present," Mr Ingerson said.
"Those that do come up are selling quickly and for good prices. Properties that are not well presented, lacking maintenance, or with perceived flaws are either failing to sell, or buyers are discounting their offers accordingly."
Main urban area values appeared to be stabilising, but there was variation between cities and across the price range, Mr Ingerson said.
Values in the provincial centres had been flat for several months now, while in the rural areas house values continued to slide back.
The September 4 Canterbury earthquake and aftershocks had led to a significant slowdown in the number of house sales in the region.
Banks, insurance companies and potential buyers were all doing careful due diligence and seeking reassurances about the structural integrity of properties, Mr Ingerson said.
That had slowed the sales process, even for properties under contract before the earthquake. Positive signs of normal market activity were beginning to return, especially in less affected areas of Christchurch.
Sales in Canterbury in September were insufficient to create statistically valid indices, so QV had been unable to gauge how house values had been affected.
The lack of Canterbury data would not have significantly affected the overall New Zealand index as before the earthquake values in Christchurch were showing similar trends to other main urban areas.
QV expected current trends to continue in coming months. While new listings were likely to increase through spring and summer, sales volumes were not expected to increase dramatically, Mr Ingerson said.
Nationwide values dropped 9.6 percent from the late 2007 peak to a low point in April 2009, before recovering throughout the rest of 2009 and early 2010. Between September last year and March values rose 3.4 percent, and had since eased back 1.4 percent.
Values in the Auckland area increased steadily through most of 2009 and early 2010 before falling slightly in April and May, and since then had been relatively stable. As a result values were still 4.3 percent above the same time last year but this gap was closing, QV said.