Average house prices in New Zealand are continuing to fall but at a slower pace than in previous months.

In the three months ended July, the average home price declined 1.5%, a lesser pace than previously recorded, as per the Quotable Value (QV) house price index.

In the June quarter, property values edged down 1.8%, 3.4% in the May quarter and 3.5% in the April quarter, RNZ reports.

The national average house price in New Zealand was $888,999. This is 10.2% lower than at the same time in 2022 and 0.3% less than at the end of June.

Home values may continue to fluctuate for the foreseeable future, according to QV operations manager James Wilson, predominantly due to a drop in sales activity.

Over the long-term, the trend is a property market bottoming out following a considerable fall in home values over the past 18 months, Wilson added.

"But it's still early days, and we're unlikely to see the market reach a consistent bottom overnight.

"Instead, we're likely to see significant variations in performance in sub-markets across the country, as we see demand return in certain areas and for certain property types at different times. Meanwhile, that heightened level of volatility is set to continue until sales volumes increase further."

Home values are down 1.5% in Auckland and 1.7% in Wellington, whilst last month, there was positive growth in Queenstown and Rotorua, highlighting the increasing volatility in the market.

Furthermore, four out of 16 principal urban areas monitored by QV revealed minor growth in home value in the three months to July. These are Hamilton with 0.1%, New Plymouth with 0.4% growth, Christchurch with 0.8% and Invercargill also with 0.8%.

In addition, first-time buyers were the most active, yet investors were showing renewed interest, Wilson added.

"While investors never removed themselves from the market entirely, they have adopted more cautious attitudes in recent times. Now we're starting to see growing numbers competing for entry-level stock in areas they view as offering good value for money."