The volume of unsold houses in the country's northern region is rapidly rising and prices are taking a hammering.
Harcourts, New Zealand's biggest real estate chain with 180 offices, yesterday released figures that showed just how poorly the residential market is performing. The northern region, which takes in Auckland, is really feeling the pinch, suffering from declining prices and sale volumes.
Agents operating in the region had a 69 per cent increase in property on hand between October last year and last month.
Average sale prices dropped 11 per cent, from $512,000 to $455,000.
Exclusive listings dropped 19 per cent from 595 listings to 485 but those picking auctions or tenders rose 31 per cent, from 133 listings to 174.
The number of written sales dropped 40 per cent from 432 to 260.
"Activity statistics reflect a very slow month, significantly behind October last year," Harcourts said in its MarketWatch publication, out yesterday.
Bryan Thomson, Harcourt's chief executive, remained optimistic about the trend for the next few months.
Last month saw the lowest volume of October sales Harcourts has seen for some time but the scene is now set for the market to heat up again as we head into summer," Mr Thomson said.
A Harcourts office in Auckland had shut but Mr Thomson said this was more of a merger with another branch.
Lower mortgage interest rates should fire up the market and there was every reason to look forward "with hope and confidence that the level of sales activity would increase".
Prices were hardest hit in Christchurch, down 18 per cent from $446,000 to $364,000. Written sales declined 24 per cent from 500 last October to 374 last month. But sales volumes fell more in the South Island provincial areas, down 37 per cent from 287 to 181. Wellington prices dropped 9 per cent from $369,000 to $337,000.
Central North Island sales dropped 34 per cent from 333 deals last October to 219 sales last month. This was the only area which showed a price rise, up 5 per cent from an average $372,000 to $389,000.
Last week, the Real Estate Institute reported house prices in Auckland and nationally were up and a rosier picture was finally beginning to emerge. Auckland prices rose from a median $420,000 in September to $433,000 last month and the national median nudged up from $330,000 to $335,000.
The data was widely criticised by economists who said monthly figures showed little and falling sales volumes were far more important. Industry experts say poor incomes are forcing agents to flee the sector which employed about 18,000 people at its peak two years ago but now only employs around 13,000.
* New Zealand median house prices
(Figures: Real Estate Institute)
October 2003 $227,000
October 2004 $252,500
October 2005 $295,000
October 2006 $324,000
October 2007 $350,000
October 2008 $335,000
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