Residential property values stabilised in January after nine months of decline, according to government valuer Quotable Value.

Average property values in January were 1.5 per cent lower than the same month a year ago when property values were still climbing, although they were unchanged when compared to December's 0.9 per cent decline.

Values are now 5.8 per cent below the market peak of late 2007.

"Despite overall New Zealand values stabilising in recent months, there is considerable variability between areas," said research director Jonno Ingerson.

"Values across the combined main centres have been stabilising, while across combined provincial and rural areas values have continued to slide."

Of New Zealand's three main urban areas, Christchurch was the only centre to record any growth in January, with demand for housing undamaged by the September 4 earthquake helping to lift prices 0.3 per cent higher when compared to the same month last year.

In January, Auckland's values were stable, down 0.6 per cent on 2010 levels, while in Wellington values have been rising since October after declining steadily in the six months prior, and are now 2.5 per cent below last year.

The remaining centres all declined in January as economic uncertainty and lack of confidence sap demand, with values in Hamilton down 3.4 per cent on the same month last year, Dunedin values down 3.7 per cent, and Tauranga down 2.2 per cent.

New Zealand's property market has been struggling to haul itself out the slump it fell into last year as households focused on repaying debt amid historically low interest rates.

In December the median house price fell 2.2 per cent to $352,000 compared to the same month in the previous year, according to sales data from the Real Estate Institute.

The record low volumes of property sales have kept new construction in a rut, with building consents falling to their lowest level of issuance since April 2009 in December.

"Sales activity slowed down over December and January as is usually the case," Ingerson said.

"With the Christmas holidays over and people settling back into their routines, some will now be considering their plans for the year and beginning to act on them. However it is still too early to tell whether the property market in 2011 will be any different to 2010."

(Source Stuff.co.nz)