The average house price in New Zealand fell to $340,000 in January, down from $345,000 in December 2007 .

The number of houses sold was the lowest for seven years, adding to the concerns of the real estate industry.

REINZ National President Mr. Murray Cleland commented:

“It is clear from the days to sell and low sales volumes that there is a growing tension between the prices vendors are seeking and what buyers are offering – buyers have been quick to sense that the market is weakening and they are ready to take advantage of that situation.”

“The abnormally low sales figures are more of a concern than the median prices, in some ways, because they tell us that the market’s liquidity has reduced significantly and logically this will impact on prices.

“Those that need to sell will have to meet the market and that will involve accepting lower prices, while those that might just be ‘looking’ to sell are more likely to withdraw from the market rather than face prices lower than their expectations.

“Although we would prefer to see the next two months trends first, it is obvious that people need to be prepared for prices to move back in 2008 which may have consequences for those that are heavily geared, especially those with multiple rental properties in that situation, at a time of rising interest rates.”

• House prices are 4.0 percent higher than a year ago, when New Zealand’s median house price was $327,000.
• Sales of properties fell from 7,566 in January 2007 to 5,186 in January 2008. This was the lowest number of sales in January for seven years.
• The average number of days to sell a house was 49, the highest for six years, and 11 days more than the average 38 days in January 2007.

Compared with prices in December, five out of New Zealand’s twelve regions reported price rises in January and seven reported falls.

On an annual basis, eleven of the twelve regions saw an increase in prices and one saw no change.

Annual NZ House Price Changes