New Zealand property values rose for the third straight month amid solid sales activity, as low interest rates and a shortage of quality housing keep the market active.
House values fell 5% in the 12 months ended July 31, compared to 7.1% decline in the period through June, according to QV Valuations. The average sale price rose to $382,758 last month from $378,535 in June.
"There are also signs that more vendors are putting their properties on the market - this is perhaps in response to the reports of shortages of listings, signs property values have stopped declining and increased buyer optimism," said spokeswoman Glenda Whitehead.
"Although activity has increased at the lower end of the market, values are increasing more in the middle value range of the market."
More people believe now is a good time to buy property, with price expectations returning to "neutral" in the latest ASB Housing Confidence survey out last week.
Reserve Bank Governor Alan Bollard acknowledged a pick-up in the property sector as rising net migration and lower interest rates boost demand for houses, and economists say Bollard can't afford to cut rates anymore for fear of stoking the market and reigniting a housing bubble.
The government valuation agency said another housing boom was unlikely, with rising unemployment threatening to dampen the market. The jobless rate increased to a nine-year high of 6% in the three months ended June 30, according to government data.
In Auckland, property values continued to slow their annual decline to 3.5% in a rolling three month period ending July 31 from 5.9% in June, while the average sale price gained to $500,315 from $489,444.
Hamilton property values improved to a 2.9% decline in the three months ended in July from 6.6% the month before. The average price fell to $344,081 from $337,851.
Tauranga property values fell 6.6% from an 8% drop in the previous period, as the average sale price retreated to $415,927 from $427,927.
In Wellington, values fell 4% in the rolling three month period, slowing from the 6.5% annual decline reported in June. The average sale price slipped to $429,571 from $430,939.
Christchurch property values fell 5.5% from 7.3%, with the average sale price gaining to $342,993 from $339,962.
Dunedin property values fell 1.4% in the three months through July from a year earlier, from the 4.5% annual decline in the period through April. The average sale price gained to $258,813 from $256,493.
To view a snap-shot of the main urban areas, read "Regional snapshot: QV".