Property prices throughout the country have now fallen by an average of 5.8% over the last year and New Zealand is now moving into a recession.
'Indications last month that a more optimistic mood had come over the market have since evaporated,' said Mark Dow of QV Valuations which gathers the figures.
'We are moving into an economic recession and there is plenty of speculation that things will get worse before they get better. Uncertainty about the impact of the global credit crisis, the usual lack of activity prior to an election, and significant tightening of lending policies by the banks is contributing to pessimism in the property market,' he added.
There is little expectation of any resurgence soon. 'The requirement to have a significant deposit will take many first home buyers and investors out of the market, reducing demand and putting further downward pressure on prices,' he said.
The price falls varied across regions. In Auckland they are down 7% compared to the same time last year. Hamilton City's values have slipped slightly down to 8.8% and Tauranga down to 7.6%. The Wellington area has also declined further to 5.4%, Christchurch by 1% and Dunedin by 8.5%.
Most of the main provincial North Island centres are showing further declines in year on year values. Whangarei has declined by 6.6%, Rotorua by 6.4%, Napier by 4.4%, Hastings by 7%, New Plymouth also 7% and Wanganui by 5.5%.
Palmerston North has seen the steepest decline in the country at 9.4%, while Gisborne is the only centre to improve slightly with a drop of 10.1% compared to the 10.4% reported last month.
In the South Island, Nelson dropped a down 4%, Queenstown Lakes by 5.3%, and Invercargill just 1.6%.
Many vendors have been unable to sell and so many have chosen to rent their property instead that in some areas of South Auckland, East Auckland and Onehunga there is now an over supply of rental property and some landlords are having to drop rents.
'Given the latest economic forecasts and the state of the finance sector the prices in the residential housing market are expected to decline further for some time yet. The traditional home lenders have also tightened their lending policy which will further reduce the pool of potential buyers, leading to more downward pressure on prices,' added Mr Dow.