The decline in January follows a 7.4% drop in December, according to the QV Valuations report. The figure is calculated over the three months ending in January from the same year-earlier period.    

“Declining interest rates would normally stimulate buyer activity, but concerns over job security and a more cautious approach to lending by financial institutions seems to be preventing this,” said Blue Hancock, a QV Valuations spokesman.   

“Home affordability has definitely improved and there are good opportunities in the current market for those who can afford it, with motivated vendors and decreasing interest rates,” he said. 

Reserve Bank Governor Alan Bollard last month said there is room for further cuts to the official cash rate this year as the global economy falters. Figures last week showed the jobless rate climbed to 4.6% in the fourth quarter, and some economists predict the rate will top 7% this year.  

The average New Zealand sale price for January rose slightly to $382,762. 

In Auckland, property values fell 9%, following an 8% fall in December, while the average sale price rose to $496,618 from $489,737.    

In Hamilton, values declined 10%, deteriorating further from the 9.3% drop in December, while the average sale price rose slightly to $342,347. In Wellington, property values slipped 8.5% after a 6.9% decline in December, while the average sale price rose to $431,088 from $415,811.    

Christchurch property values decreased by 8.8% following an 8% decline in the previous month, while the average sale price fell to $347,157 to $348,953. In Dunedin, property values fell 8.3%, after a 7.7% drop in December while the average sale price was unchanged at $254,088.