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Property values have continued to decline gradually in the past few months, as market sentiment remained cautious.

In the latest national figures from valuation company Quotable Valuations, property values in August were 1.1 per cent down on March, after an overall rise of 4.3 per cent in the last seven months.

Values are now 3.1 per cent above the same time last year and 5 per cent lower than the market peak of late 2007.

Average sale prices were up from $407,191 last year to $409,700. Valuation manager Glenda Whitehead said this was due to fewer lower-value properties selling. She said low buyer demand and a backlog of unsold properties were causing values to gradually drop.

"The number of new properties being added to this pool appears to have slowed, as potential vendors choose to wait until the market begins to show signs of recovery." But Real Estate Institute of New Zealand's Rotorua spokesman Ian McDowell said market activity had risen locally recently.

See The Daily Post Property Report liftout for a breakdown and comment on the local property market from Mr McDowell.