The residential property market is a mixed bag in terms of activity but looks set to "potter along" for the next while, according to QV.
QV research director Jonno Ingerson says it is hard to make a blanket statement about what's happening in the market because activity is so localised.
He says there are many different predictions about how the market will behave over the next while, but QV is predicting not a lot is going to happen, despite changes to tax affecting property investment.
"We see the market as pottering along. The feeling from our valuers is that overall it's business as usual," he says.
"Investors are going to get hit [with rises in GST and unable to claim building depreciation], but they will carry on."
The composition of the residential property market has seen a shift compared to the same time last year, with the latest figures from QV showing a widening gap in values compared to the market peak.
Nationally, values are now 4.1% below the market peak of late 2007 (down from 3.9% reported in April) and up 6% from the market low of April 2009.
Values for May are now 5.6% above this time last year, from the 6.1% reported a month earlier.
Ingerson says the decline in annual change is being driven both by what was happening this time last year and what has happened in recent months.
"At this time last year values were beginning to increase again after reaching their low in April 2009. They continued to increase until Christmas before flattening for the first few months of this year and now beginning to decline slightly," he says.
The national average sales price for the three months to May also decreased slightly to $403,070 from $405, 235 in April.
QV notes the supply demand balance is quite different now compared to last year, with consumer confidence returning to the market in the second half of last year after the recession, which flowed into the property market.
"Enthusiastic buyers were competing over a relatively short supply of properties and as a result prices were pushed up," Ingerson says.
But earlier this year the composition shifted, with more properties coming onto the market at the same time as buyer confidence was wavering due to pre-Budget announcements around tax changes aimed at property investment.
QV says while the tax changes to investment property may have some downward pressure on the lower end of the market, it is unlikely that the changes will cause prices to drop across the board. Instead, the company expects the general lack of buyer confidence and lower sales turnover to have downward pressure on prices in the short term.
Values in all the main urban centres have flattened or declined in recent months.