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House prices keep falling

Friday 11th July 2008

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The residential property market may bottom out over the next couple of months and rally again in spring, according to the latest Real Estate Institute (REINZ) statistics.

REINZ president Murray Cleland says the rate of decline is not as pronounced as some commentators have predicted. The latest data for June shows a gradual easing in sales from April to June this year, indicating the market is already near the bottom of its fall.

However, June sales were less than half what they were a year ago, slipping to 4305 in June from 4,372 in May, and down from 7,474 sales in June 2007. Despite the huge slide in volumes, the national median price of $347,500 is now just 2.15% lower than in June 2007. And sales transactions are taking longer with the average property taking 53 days to sell, up from 49 in May.

Cleland says there�s not a lot of confidence in the market right now, though mid-winter is always quiet.

His response to data which shows relatively stable prices on the back of falling sales is that generally people are deciding to stay put and are deferring their buying and selling decisions. REINZ agents suggest that often when people have to sell because they are on employment transfer, price expectations have to be lowered to facilitate faster sales.

The most buoyant sector of the market came at the lower end � in properties under $400,000. Sales were up from 2,680 in May to 2,708 in June. Sales of properties between $400,000 and $599,999 remained almost the same � down from 1041 in May to 1,039 in June. The biggest fall came in the $600,000 and $999,999 bracket. These dropped by 81 sales from 508 in May to 427 in June. And $1 million-plus properties dropped by 12 from 143,131.

The biggest decline in prices came in Wanganui and Manawatu which fell 13.81% from $248,000 to $213,750.

Auckland and Wellington were close to the national average decline at 2.24% and 2.26%, while Central Otago Lakes District properties bucked the trend with properties selling 22.38% higher than a year ago.

To view the latest statistics in your region quickly, click on the links below:

Waikato/Bay of Plenty/Gisborne
Hawke's Bay
Central Otago Lakes

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