SOURCE NZ Herald
5.00AM Saturday November 10, 2007
By Anne Gibson

Falling house prices and low sales volumes continued to dog the residential real estate sector with figures out yesterday showing a flattening pattern of activity.

Most banking economists predict a soft landing for the sector and prices flattening rather than plummeting.

The Real Estate Institute’s sales figures for last month showed 6854 residential properties sold, only marginally up on September’s 5894 sales but well under the 10,000 deals being recorded monthly at the height of the boom around 2003.

Prices have eased back. The national median fell from $351,500 in September to $350,000 last month, which institute president Murray Cleland said still showed some resolve in the face of a slowing market.

And prices are continuing to ease throughout many Auckland suburbs, as agents report low turnouts at open homes, fewer listings and lower buyer inquiry levels.

Of the 12 areas surveyed last month, prices fell in eight and rose in four and it now takes 34 days on average to sell a place, up on the median 32 days recorded in September.

Mr Cleland said the low sales were skewing statistics downwards.

“In other words, our advice is don’t read too much into these medians in this current market,” he said.

But he said it had now become clear that the annual rate of growth in property prices was slowing markedly, with the annual percentage growth rate down to 8.02 per cent for the 12 months to October, compared with 12.30 per cent to September.

BNZ chief economist Tony Alexander released a survey of 27 real estate professionals which found overwhelmingly pessimistic sentiments.

When asked about the market outlook, six respondents were positive, two neutral and 19 negative. One Auckland agency said sales volumes were the lowest for seven years.

“The median price is holding up, but is masking downward pressure. A volume fall-off at the lower end of the market at a greater rate than at the top end is evident and that keeps the median at an artificially high level,” the respondent said. “Speculative residential developers are finding it nearly impossible to source funding because finance companies just don’t have any to lend. [There’s] a noticeable drop in open home attendances.”

Auckland firm Barfoot and Thompson said it sold 796 houses last month, down 18.6 per cent on a year ago. The agency’s average sale price was $546,679 last month.

James Lockie of Auckland mortgage brokers Cairns Lockie said his firm was offering one-year mortgages at 10.08 per cent, two- and three-year fixed rates at 9.44 per cent and five-year mortgages for 9.49 per cent.

Sale medians

September October

Northland $320,000 $310,000

Auckland region $441,500 $445,000

Rodney $490,750 $475,000

North Shore $520,000 $545,000

Waitakere $375,000 $365,000

Manukau $430,000 $447,000

Papakura $363,500 $342,000

Waikato/BOP/Gisborne $322,750 $329,000

Taranaki $265,000 $262,250

Wellington $380,000 $365,000

NEW ZEALAND $351,500 $350,000