Rotorua house prices drop to 8% below peak

Rotorua house prices continued on a downward spiral - against national trends - dipping nearly 1 per cent in the past three months, and nearly 8 per cent less than peak values seven years ago, latest monthly QV residential price movement index figures show.

The figures released last week show the average house price in Rotorua was $271,188 - 0.8 per cent lower than in May, and 7.6 per cent lower than market peak in 2007.

By comparison average prices in Whakatane rose slightly in the past three months - up 0.3 per cent - although 0.4 per cent down from same period last year, and 15.2 per cent down from 2007.

The average house price in Whakatane was $294,950.

In Tauranga average house prices rose 0.8 per cent since May, and 5.1 per cent from last August.

However overall average house prices slipped 5.7 per cent in Tauranga from 2007, the latest figures show.

Nationally residential property values for August increased 6.9 per cent in 12 months, and 1.7 per cent since June.

Property values nationally were now 15.8 per cent above the previous market peak of late 2007.

Yearly increases dropped 5.2 per cent, and 0.8 per cent below the 2007 peak when adjusted for inflation.

The Auckland property market remained a hotbed with an 11.4 per cent increase year on year.

In the past seven years property values in the Queen City have skyrocketed 33 per cent - 9.7 per cent per year, and 13.8 per cent since 2007, when adjusted for inflation.

"Since September last year the growth rate of New Zealand residential property values has been slowing and this trend has continued over the past month," said QV spokeswoman Andrea Rush.

The latest QV figures come on the heels of a recent Massey University report which showed housing affordability had worsened due to mortgage rates and median house prices outstripping annual wage rises.

Average mortgage interest rates in the past year increased 5.57 per cent to 5.64 per cent, while median house prices had risen by $38,000.

In contrast wages had increased, on average, $34.53 in the past year.

In the Bay of Plenty, housing affordability declined 4.8 per cent in 12 months, the report showed.