House values continue to fall, with some main centres seeing an increase in the rate of decline.

The latest QV House Price Index shows home values fell by a national average of 0.2 percent over the three months to the end of May, which was down slightly from the 0.1 percent quarterly growth reported in April.

The average house value was sitting at $923,713, which was 3.9 percent up on the year earlier, though 13 percent down from the peak in late 2021.

Auckland led the market down with a 1.4 percent drop in quarterly values for the fourth month in a row.

Wellington (-0.3 percent) also recorded its first average quarterly home value reduction since the end of winter 2023. Tauranga (-1 percent), Hamilton (-0.4 percent), Palmerston North (-0.3 percent), and Nelson (-0.2 percent) all experienced similarly small quarterly declines.

At the other end of the spectrum, Invercargill saw the largest increase in home value growth at 3.2 percent in the May quarter.

Others to see some gains included Rotorua (2.5 percent), Christchurch (1.4 percent) and Dunedin (1.9 percent).

"Home values continue to bobble up and down from month to month and quarter to quarter, but they aren't moving one way or the other with any real conviction," QV operations manager James Wilson said.

"The housing market has largely stalled, and now the seasonal slowdown is well and truly upon us, with both buyers and sellers continuing to grapple with difficult economic conditions."

He said a glut of houses for sale was contributing to price weakness.

"So those who are in a position to buy right now have the upper hand."

He said the end of the first home grant scheme would also affect demand, along with a number of other regulatory changes that would take effect from 1 July.

The changes meant banks have to comply with new debt-to-income (DTI) restrictions that would limit the amount of debt that borrowers would be able to take on, relative to their income.

At the same time, loan-to-value ratios (LVRs) would be loosened, and the bright-line test would also be shortened to two years.

He said changes to the bright-line test restrictions may also see an increase in the number of homes for sale, though interest rates would continue to make home ownership unaffordable for many.

"Property owners might look at our latest figures and start getting that sinking feeling again, while first-home home buyers might even look at them with renewed optimism.

"But the reality is a market that is stuck between a rock and hard place, at least until mortgage pressure eventually lifts."