Property prices stabilise with cheaper lending rates: QV

House values fell 8.1% in the 12 months ended May 31, compared to a 9.2% decline in April, and was the second month-on-month improvement since September 2007, according to QV Valuations. The average sale price fell to $371,555 last month from $372,981 in April, and is now 4.1% lower than the same time a year ago.

"The recent buoyant activity in the residential market has been fuelled by people taking advantage of lower mortgage interest rates," said spokesperson Glenda Whitehead. "The recent stabilisation in values indicates that the wider market is moving toward some form of equilibrium."

Recent data releases from the Real Estate Institute, Barfoot & Thompson, and Harcourts New Zealand all noted a pick-up in the property market, while the ANZ National Bank's eight gauges of the sector predict it's "showing signs of life". The ANZ said the overall tone is negative as unemployment rates were still uncertain, but rising migration should stoke demand in the short-term.

Whitehead said the coming winter months were traditionally slow for the sector, and "will provide a true test whether the recent property market revival will continue."