The average house price in New Zealand fell to $337,500 in February, down from $340,000 in January.

The number of houses sold was the lowest in February for seven years.

House prices in New Zealand are now just 0.74 percent higher than they were in February 2007, when the average price was $335,000.

REINZ National President Mr. Murray Cleland commented:

“Any further weakening of prices in March will see the market move into a negative percentage which has huge ramifications.”

“Treasury has already begun to talk about the impact of falling property prices while at the same time the Reserve Bank is talking about maintaining the current 8.25 per cent Official Cash Rate until 2009.

“It might be testimony to the independence of the Central Bank, but for a government to be going into an election year with potentially falling property prices and rising mortgage interest rates, is not a good look.”

Mr Cleland said the wisdom of the Reserve Bank having increased the OCR four times in a row last year, having left it unchanged for the 12 months prior, had to be called into question.

“The overwhelming goal of controlling inflation is recognised, but the cost to the average New Zealander during 2008 could be considerable with reduced household spending as mortgage costs squeeze disposable incomes, while falling prices will leave some with negative equity and the prospect of unhappy conversations with their bank.”

• House prices are 0.7 percent higher than a year ago, when New Zealand’s median house price was $335,000.
• Sales of properties fell from 9,357 in February 2007 to 6,356 in February 2008. This was the lowest number of sales in February since 2001.
• The average number of days to sell a house was 50, the highest in February since 2002, and 18 days more than the average 32 days in February 2007.

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

On an annual basis, eight of the twelve regions saw an increase in prices, one saw no change, and three reported falls.

Annual NZ House Price Changes