QV Valuations' latest property market summary shows the Tauranga market is continuing to fall.

QV's residential price index shows the average sales price in Tauranga is only 88 per cent of what it was at its pre-recession peak in the third quarter of 2007.

Calculated using sales data for the three month period ending May this year, the average sales price in the Tauranga property market was $411,235.

QV Valuations registered valuer Shayne Donovan-Grammer says the market is subdued, with prices stagnating and activity moderate.

'There appears to be a shift towards more affordable housing with buyers lowering their expectations to fit their budget and keep the level of debt in check,” says Shayne.

'New homes on half sized sites that are well located are in demand.

'This is because the prices are realistic, although the size of the land may not be ideal for the buyer.

'Overall, the market is holding, but the average transaction is more heavily negotiated as buyers expect a good price.”