House values start to slide

National property value growth slid to just 4.9 per cent in the 12 months to the end of April, down from 6.5 per cent growth reported in March, but spring could bring a resurgence, Quotable Value says in its latest report.

The national average house sale price remained steady at $388,456.

QV spokesman Blue Hancock said most of the growth in the year to April happened last autumn.

"Over the first three months of 2008 we are beginning to see property values easing back over most areas of New Zealand.

With the number of property listings still high and buyer demand reducing, values were likely to fall further in the next few months, Mr Hancock said.

"After such a sustained period of growth across the property market, a correction was inevitable, and we are definitely seeing that happening." The extent of any price declines would determine when buyers returned to the market.

If immigration remained positive, rents increased and investors began to see bargains, demand could rebound, Mr Hancock said.

Wellington city's growth rate remained the highest among the main centres at 5.3 per cent, down from 7.7 per cent. Property values for the Wellington region rose by 5.6 per cent in the year to April, the lowest for three years and down from 8.1 per cent for the year to March.

The growth rate peaked at 16.5 per cent for the 12 months to August last year.

"The easing trend in the market is now very apparent and is likely to persist for a few months yet," QV says in its report.

"However, these declines may not last long as the traditional spring surge leading to firmer prices may again commence in October."

The average sale price for the Wellington region slipped $2191 to $438,292.

That follows a $17,000 plunge in the year to March.

A lack of buyers caused the growth rate of values in Auckland City to almost halve to 3.2 per cent, the biggest drop among the main centres.

To attract offers, real estate agents are increasingly including the asking price in advertising and moving away from auctions as the preferred sales method.

Advertising slogans like "vendor must sell", "mortgagee sale" and "all offers considered" are also becoming more common, QV says.

ASB Bank lowered its fixed mortgage interest rate for six- month to three-year terms on Friday, after a similar move by Kiwibank on its two-year rate earlier in the week.

But Bank of New Zealand chief executive Cameron Clyne said that though the Reserve Bank was likely to cut the official interest rate this year, leading to lower floating mortgage rates, the continuing volatility in international money markets meant longer-term fixed interest rates would be slower to fall.