Asking prices for properties are falling but they are taking longer to sell, figures released today show.

Statistics released in Realestate.co.nz's latest New Zealand Property Report showed the average asking price in July was $400,481, nearly $10,000 from the June average of $410,058.

This was the lowest level in a year and close to mid-2008 levels, Realestate.co.nz chief executive Alistair Helm said.

Meanwhile, the inventory levels of unsold homes - measured by the number of weeks of sales necessary to clear properties on the market at any one time - was 46.8 weeks, 3 per cent higher than June and 42 per cent higher than July last year.

"While there's usually a drop in asking price in winter, the consistently high level of inventory in 2010 compared to last year highlights a more fundamental contraction in the property market," Mr Helm said.

"With sales slowing, prices falling and inventory levels of unsold houses rising, the conditions in July were a reality check for sellers, as they recognised the need to find a competitive price. We see no signs of price appreciation in the market based on current conditions.

"To give some perspective, at current sales volumes it would take nearly a year to clear current inventory on the market if no more houses were listed today."

Mr Helm said the New Zealand property trade was very much a buyer's market.

- NZPA