House prices continue slipping - REINZ

House prices are still tracking downward, but there are signs that business will start to pick up in a couple of months, according to the Real Estate Institute of New Zealand (REINZ).

There has been a slight fall in the value of properties sold in May across the country, but volumes remain steady as does the length of time required to sell a home, the report says.

Real Estate Institute president Mike Elford said the biggest issue currently facing the industry is a shortage of stock.

"With an apparent reluctance to sell in what is perceived to be a buyers' market, people are tending to hunker down and sit tight on their properties. This, combined with a seasonal trend for people to hibernate rather than put their home on the market in the winter months, has led to an acute shortage of houses on the market."

He believes this trend will continue through June and July.

"Traditionally, people start thinking about selling around August and September as the weather warms up, but until then, we expect turnover to remain consistent with the number of properties that are put on to the market."

The total number of homes sold nationwide has remained steady in May (6,291) which is marginally up on the April 2009 figure of 6,210. However, this compares with just 4,372 in May 2008, Elford said.

Following last month's pattern, turnover continues to be strong in Auckland where 2,114 properties changed hands in May 2009 compared with 1,388 in May 2008. Turnover is consistent with last month's figures across the country.

The total value of sales nationally in May 2009 was $2,601 million, (up from $2,538 million in April).

Of these, $1,151 million worth of sales took place in Auckland, $293.5 million in Wellington and $314 million in Canterbury/Westland.

Sales of properties in the $1 million + category rose from 151 to 180 in May 2009 compared with April 2009. There was an increase in property sales in the $600k - $999,999 bracket from 631 to 657.

Properties in the under $400,000 and the $400k - $599,999 bands remained consistent from April to May.

The median price for homes across New Zealand remains constant over the past two months with the May 2009 national median of $337,500 compared with April 2009 at $340,000.

There has been a 2.17 per cent drop in the national median house price since May 2008.

- NZ HERALD STAFF