The average house price in New Zealand fell to $330,000 in August from $340,000 in July .

In July the market had staged an apparent recovery, but the market has now well and truly reversed with sales down to 4,220, the lowest recorded in the 26 years the Real Estate Institute has compiled figures.

“It looks as if the leading economists are on the money with predictions of a 5 to 10 per cent decrease in the market, followed by a period of stability at the end of this year or early in 2009,” REINZ National President Murray Cleland said.

The drop in sales was a concern because, “history tells us that the market normally recovers from the winter blues from September 1, so all I can say is there is a lot riding on spring.”

Mr Cleland also warned that – with such low sales figures – average prices were often not indicative, “Some previous month figures can skew trends and equally the current month contains some median price changes that can only be attributed to the low sales.”

Mr Cleland cited the Gisborne median price as an example, having fallen to $212,000 in July on 31 sales; it appeared to recover dramatically to $290,000 in August on just 29 sales – which is well down on the sales volume of August 2005 when 72 sales took place.

• House prices are 5.7 percent lower than a year ago, when New Zealand’s median house price was $350,000.
• Prices are down 6.2 percent from their peak of $352,000 in November 2007.
• The number of properties sold fell from 6,394 in August 2007 to 4,220 in August 2008. This was the lowest number of sales for 26 years.
• The average number of days to sell a house was 55, the highest August figure since at least 1999.

Compared with prices in July, nine out of New Zealand’s twelve regions reported price falls in August and three reported rises.

On an annual basis, ten of the twelve regions saw a fall in prices and two reported rises.

Annual New Zealand House Price Changes