The property market continues to deteriorate, according to the Mike Pero Mortgages/Infometrics Property Cycle Indicator (PCI).
The PCI is a sensitive measure of housing market activity based on house sales, price movement and time it takes to sell a house and runs on a scale of -10, representing a strong downturn, to +10, signifying a strong upturn.
The national PCI in March was down to 1.61, compared to the 5.22 recorded at the beginning of the year and from 3.98 in February, although Mike Pero chief executive Shaun Riley expects it to get into negative territory in the next month or two.
"This shows a definite continued easing off in the housing market," he says.
The one factor to buck the downward trend of the property market has been the steady median house price, which rose to a new record in March of $360,500, up $10,500 on February's result.
But Riley says that despite this, the jump in price is most likely a false picture of the strength of the market.
"The March figure is likely to be a technical bounce-back from weak results in January and February. Prices tend to be the last of the three indicators in the PCI to turn around, so it's expected these will also follow the deterioration in sales with a lag."
Sales volumes in March were down 8% compared to a year ago, reflecting buyer demand being fuelled by uncertainty around pending tax changes.
"The strength of buyer demand continues to be determined by uncertainty about the tax treatment of investment property ahead of next month's government Budget," Riley says.
Time taken to sell a house stands at 35 days for March, down nine days from March last year.
A number of regions throughout the country moved into negative PCI territory in March, with the two main North Island cities losing ground, although still managing to stay positive.
Auckland dropped to 3.95 from 5.80 in February and Wellington also sank to 1.91 from 4.47 a month earlier. Both regions have dropped 3.95 and 5.18 respectively since the beginning of the year, illustrating the steadily declining property market.
In the South Island, Canterbury/Westland dropped 1.69 from February into the negatives, with a PCI of -2.06, as did Nelson/Marlborough with a PCI of -1.55. Otago also lost ground with a PCI of -2.49, declining 2.35 from the month earlier.