KEY POINTS:
The national median house price has reached a record $350,000, but has fallen slightly in Auckland, new figures show.
Experts say it is too soon to interpret the drop in the Auckland median from $452,000 in April to $450,000 last month as the start of a slump. But they warn it could reflect a slight slowing in the city's lucrative property market.
The Real Estate Institute figures released yesterday show that while the median price in Auckland dropped, more houses sold. In April, 2843 houses sold, jumping to 3300 last month. In May last year 2981 houses sold.
The national median house price rose $1000 last month from the previous month. This was smaller than previous increases, which institute president Murray Cleland said suggested the market was "taking a breather".
But he said last month's modest gain also had to be viewed against the rapid gains of the past four months, during which the national median had risen from $335,000 in February to $349,000 in April.
Mr Cleland said prices had eased in Auckland after the city came under extreme buying pressure in March and April. The most marked drop was in central Auckland, where the median slipped from $510,000 in April to $492,000 last month. North Shore fell $5000 to $535,000.
Auckland University property department head Associate Professor Laurence Murphy said the $2000 drop in the Auckland median was minimal.
"But given that we've had consistent increases, it may indicate that there's a slowing down in price growth," he said. "It would be too early to say there's a definite stop in the market."
Dr Murphy said the drop was to be expected as interest rate increases had decreased people's willingness to take on debt, but it would take a few months to see if a downward trend developed.
Nationally, the median house price rose almost 15 per cent from May last year, when it was $305,000.
Of 12 regions surveyed, seven experienced gains, while the others fell slightly. Southland had the strongest year-on-year growth, with a 36 per cent increase from $130,000 in May last year. Wellington was second, with a 22 per cent increase from its May 2006 median of $315,000.
Chris Taylor, partner at real estate firm The Joneses, also said the median price drop in Auckland may indicate a cooling market.
"I don't think it's a cause for alarm or that it's necessarily a signal that things have changed significantly, but I think it's perhaps a general directional that some of the heat's starting to come out."
He said consumers were starting to "speak with their pockets" and spend more conservatively after the increase in interest rates and the Reserve Bank's intervention in foreign currency markets.
"Would there be anybody out there who's expecting rampant property growth in the next 12 months? I wouldn't have thought so."
But Barfoot & Thompson, which works on average rather than median house prices, did not believe there was a slowing in the Auckland market.
Director Peter Thompson said not only had sales volume increased, but the average sale price had risen from $522,000 in April to $557,000 last month.
"The prices are still going up and it's over all price brackets of Auckland the sales are turning over."
He said the market was steady and was likely to remain so for six to eight months. "We don't see any slowdown, but we don't see any boom either. It's just what we predicted three or four months ago."
