The downturn in the housing market is close to the fastest rate in nearly 14 years.

CoreLogic's House Price Index, which measures changing property values, indicated the pace of decline was picking up, with values falling another 1.8 per cent in August, twice the rate of July's 0.9 per cent drop.

CoreLogic head of research Nick Goodall says the three-month fall of 3.5 per cent is heading to depths seen in the global financial crisis in August 2008, when annual values fell 4.4 per cent.

Expensive and restrictive credit conditions are driving the market downturn which can be seen throughout the country, he says.

Reduced demand for mortgages is driving interest-rate competition between banks.

"The already-smaller pool of would-be buyers, due to tighter, more expensive credit, are happy to bide their time in the falling market," Goodall says.

Wellington was the first major centre to drop into negative territory last month, however, August's annual figures shows Dunedin and other main urban areas have now joined it.

Christchurch is proving more resilient with values still 16 per cent up on the same time last year.

"Consumer sentiment has shown signs of bottoming out, probably helped by recent falls in short-term interest rates and whispers of a market trough approaching for some markets.

"The borrowing environment remains tough, though, and along with stretched affordability off the back of increasing interest rates, a firm bounce-back in values is not expected."

A strong labour market, with low unemployment, was helping homeowners with rising mortgage repayments. Credit arrears remained low according to credit agency Centrix and the Reserve Bank.

Mortgagee sales also remained low, and well below the peak of 777 in three months ended June 2008.

-RNZ.