Asking prices for residential property have fallen almost $22,000 in four months, falling nearly half of that in July from a month earlier, according to Realestate.co.nz.
The site's latest NZ Property Report shows cautious sellers were pricing new listings competitively to seek out buyers in a slow-paced property market.
Asking prices fell nearly $10,000 in July from $410,058 in June to $400,481 and are now back down to levels seen during both July 2009 and July 2008. Current asking prices also remain 6.7% below the peak of the market back in October 2007, which was $429,033.
March saw the 2010 peak for asking prices of $422,648.
The number of new listings coming onto the market eased slightly in July, with 10,586 new listings for July, down a seasonally adjusted 2.3% from June's 11,733 listings.
The stock of unsold homes rose slightly from June, after previously beginning to fall over the two preceding months.
The level of unsold houses on the market at the end of July totaled 52,404, representing the equivalent of 46.8 weeks, compare to June's 45.3 weeks.
"With the property market now firming in the middle of winter, the level of new listings coming onto the market has eased to al level expected of this quieter period of the year," Realestate.co.nz says.
"It would appear that set against this market with high inventory and strong new listings, sellers are heading the advice of real estate agents to price property to attract interest in the market which is what is driving these more competitive prices."
ASB economist Jane Turner says the rising number of unsold houses will continue to push the market out of balance, putting pressure on house prices.
"We expect to see house prices fall around 3% over the second half of the year, after remaining surprisingly steady over the first half of the year," Turner says.
The market situation between provincial and metropolitan New Zealand continues, with new listings in the three key metro areas seeing an 11.6% decline in new listings in July, compared to a 2.3% increase for the provincial regions.
In July, of the 19 regions throughout the country, all but five are showing a significant buyer's market.