CoreLogic's latest house price index showed values are down 10.5 percent from a year ago. Photo: RNZ / Nate McKinnon
House prices continue to fall in an "orderly" manner as households tighten their belts amid higher interest rates and inflation pressure.
CoreLogic's latest house price index showed values fell another 1.1 percent in March, down 10.5 percent from a year ago.
It represented a fall of $109,000 over the past year, with the national average value at just under $934,000.
It was the second consecutive month this year that house prices decreased by more than 1 percent, after a flat end to 2022.
CoreLogic chief property economist Kelvin Davidson said the market correction had been controlled so far.
"[The correction] is getting pretty substantial but it has been relatively orderly, people aren't under massive pressure to sell, we're not seeing that big spiral down in prices, there's not really non-performing loans, not really mortgagee sales," he said.
While interest rates were high, unemployment was low, meaning households were able to meet the higher cost of debt, he said.
He forecast the market downturn to end in the second half of this year.
Davidson said fall in prices should be kept in context with the house price boom between March 2020 and March last year.
Prices remained about 30 percent higher than pre-Covid levels.
"Interest rates for both new borrowers and existing borrowers who are re-pricing remain elevated, and this is requiring some careful budgeting," Davidson said.
"Mortgage availability also remains restricted and neither buyers nor sellers are in much rush, meaning market activity is low. These factors make it easy to see why property values are continuing to drop."
Regardless of the Reserve Bank's official cash rate decision on Wednesday, there were signs of a peak for mortgage rates, he said.