New Zealand's property downturn continues, Corelogic says, but it may not last much longer.

Its house value index shows that prices fell another 0.5 percent in September, the seventh fall in a row.

Values are 16 percent higher than in March 2020 but 18 percent below their Covid boom peak.

Hamilton was down 1.2 percent in September, Wellington 0.5 percent and Auckland 0.7 percent.

Christchurch values were flat and Dunedin's were slightly up.

Chief property economist Kelvin Davidson said there were signs falling mortgage rates had started to boost sentiment but that was yet to show up in the data.

"I think you've probably got to call this a downturn. The language has been 'it's a bit soft, it's soggy, ticking along' but Auckland prices are down 7 percent from January and February, nationally they are down almost 5 percent, that's getting into downturn territory."

He said Queenstown prices were holding up, as were Invercargill's, but overall conditions were weak.

"The labour market is in a downturn. Interest rates are falling but you've still got that labour market effect, there's still stretched affordability, lots of listings - it's definitely still a buyer's market."

He said sales volumes were rising but were still 15 percent to 20 percent below normal. Finance-approved buyers had the upperhand in negotiations because the number of available houses was so high, more than 30 percent above the five-year average for this time of year.

Over the next few months there could be larger than normal numbers of people selling properties for a loss, he said.

"There are always people selling for less than what they paid but the risk is that number is a bit higher in the next few months because people are sitting on negative equity."

But Davidson expected prices should not fall much further.

"We've seen before the impact that lower interest rates can have. It's not showing up in the September figures but I wouldn't be surprised if prices only fall for another month or another two months or might not even fall much further at all."

But he said it should not bee expected that prices would spike again.

"A full-blown 'seller's market' seems unlikely as long as the economy remains weak and jobs are being lost. DTIs could dampen borrowing activity and house prices next year too. Of course, what's 'bad' for some is great for others, and the environment could generally remain reasonably favourable for first home buyers, who are already enjoying above-average shares of activity."