Key Points:

Residential property prices fell 1 per cent in October, taking the annual decline to 6.8 per cent, according to QV Valuations.

"Activity levels remain unusually low, especially considering that spring usually brings an upsurge in the number of house sales," said Blue Hancock of QV Valuations.

The average New Zealand sale price for October remained steady at $379,290.

Both buyers and sellers have been waiting to see the impact of the financial crisis, dropping interest rates and the election before committing to property transactions.

Across Auckland property values are down 7.7 per cent compared to the same time last year. The percentage is calculated by comparing the three months to October to the same three months last year.

The rate of decline across Auckland has slowed and there were reports of solid buyer inquiry at open homes, said Glenda Whitehead, Auckland manager of QV Valuations.

Activity around Auckland remains patchy, with the mid to upper end of the market attracting more buyer attention than the lower end. This could be due to the higher buyer confidence levels and their ability to obtain finance.

"At the lower end of the market, some first home buyers attracted by lower values are hamstrung by the need for a larger deposit due to the more stringent bank requirements," said Whitehead.

The activity in the investor sector was fuelled by financially stretched landlords trying to exit.

"On the other hand, established investors are making cheeky offers in an attempt to secure a good rental return," said Whitehead.

Last week Barfoot & Thompson said the city's residential property market experienced its slowest October for at least 10 years.

The agency recorded 503 sales in October, down from 796 in October last year. The average sale price increased from $495,873 in September to $520,039 in October but was down from $546,679 in October last year

QV says values in Hamilton fell by 9 per cent over the past year , down further from the 8.8 per cent decline recorded in September.

The average sale price for the city declined to $349,253. Property values in Tauranga declined by 7.9 per cent over the past year, down from the 7.6 per cent decline reported last month. The average sale price decreased to $436,765.

In Tauranga there were no signs of a spring improvement.

Sales volumes remained low as many buyers believe prices are going to drop further in the coming months.

"The properties that are selling present characteristics to the buyer which are exactly what they are looking for, as long as the property is marketed at a realistic asking price," said Shayne Donovan-Grammer, manager of Tauranga QV Valuations.

"Recent interest rate drops have buffered the increased cost of living but aren't substantial enough to reignite activity."

A number of ingredients were necessary to kickstart the market including a belief that the credit crisis was over, a higher degree of perceived job security and lower interest rates, he said. "When that will occur, is the big question."

Christchurch properties experienced a 7.8 per cent decline and Dunedin 8.2 per cent. Queenstown Lakes decline was 8.1 per cent and Invercargill 4.6 per cent.

QV notes that a year ago the Upper Hutt property market was notching up annual gains of 19.8 per cent. Now it is recording an annual decline of 7.2 per cent.

Whangarei was down 8.5 per cent, Rotorua 9.4 per cent, New Plymouth 8.1 per cent, The year-on-year change in Gisborne was unchanged from last month at down 10.1 per cent.

GOING DOWN

Fall in values over the past year

Whangarei: 8.5 per cent
Auckland: 7.7 per cent
Hamilton City: 9 per cent
Tauranga: 7.9 per cent
Rotorua: 9.4 per cent
Wellington: 6.1 per cent
New Zealand: 6.8 per cent