KEY POINTS:
The value of our homes has slipped backwards for the first time in more than seven years.
New figures out today show house values fell 2.2 per cent in the year to July - the first national drop since the price dip of 1997-2001.
The Quotable Value figures
are the latest evidence of a sliding housing market. But they came with some good news for home buyers - sellers are dropping prices as the reality of the slump sinks in.
Quotable Value spokesman Blue Hancock said many sellers were now accepting the state of the market and lowering their expectations.
The result was more sales, although numbers were still well below long-term averages.
Real estate agents have watched the number of houses sold plummet this year.
Yet selling prices have stayed stubbornly high, with some vendors choosing to hang on to their homes rather than cut the price.
Mr Hancock said the question was now when prices would stabilise.
The average New Zealand sale price stayed steady at $393,370 in July. But growth in home values fell from 12.7 per cent a year ago into the negatives, and the Reserve Bank says it will be three years before prices recover.
The latest figures tracked values for the three months ending July.
Auckland property values fell 3.6 per cent from a year ago, Hamilton values fell 5.4 per cent, and Tauranga values fell 2.6 per cent.
The only city with any real growth was Invercargill, and that trend was also heading downhill.
The most dramatic fall was in Gisborne, where values fell 8.7 per cent after reaching 25 per cent growth in July and August last year. In Auckland City, the east, south and central areas bore the brunt of the drop, falling between 4.9 and 6 per cent.
Waitakere dropped 1.8 per cent, while the Hauraki Gulf islands rose 1 per cent on very low sales volumes. Rodney and Franklin districts stayed in positive territory with a small amount of year-on-year growth.
Meanwhile, there were signs the number of sales could be about to pick up. Real estate agents responding to a BNZ confidence survey this month said they were fielding more inquiries from buyers, although others said sale volumes were still very low.
Mr Hancock said comments from real estate agents suggested they were getting more listings as spring approached. He predicted sales volumes would recover this year to sit closer to their normal patterns.
SIZE OF THE SLUMP
Fall in residential property values for the year to July:
* New Zealand 2.2 per cent
* Auckland 3.6 per cent
* Hamilton 5.4 per cent
* Tauranga 2.6 per cent
* Wellington 1.6 per cent
* Christchurch 2.1 per cent
* Dunedin 6.8 per cent
Source: Quotable Value