Property investors still sitting on their hands

Sales activity has been subdued since the government introduced tougher tax treatment of property investment, as property values slipped back in June, according to QV Valuations data.

Property values were 5.2% higher than the same month in 2009, retreating from the year-on-year gain of 5.6% in May. That's the second time since March 2009 that the increase has lagged behind the previous month. Values are now 4.3% below their peak in late 2007.

"After we got closer to the peak, a lot of people are sitting on their hands" as they weigh up what to do next, said Glenda Whitehead, QV spokeswoman.

"We haven't had a rush of investors getting out of the market" with listings down and sales activity 20% below the long-term average, she said.