KEY POINTS:
The housing slump continues to deepen with the Real Estate Institute (REINZ) reporting that the number of residential property sales in January reached their lowest monthly level since 1992.
The national median last month of $325,000 was down 4.4 per cent from $340,000 a year earlier. The latest figure was also below the $327,000 median in January 2007.
REINZ president Mike Elford said well priced properties coming on the market were selling and holding their value to a "reasonable degree".
"Of greater concern is not the price of houses, but the very limited turnover," he said.
The 3706 home sales nationwide in January were significantly down on the 5186 in January 2008, and also down on the 4302 in December.
"This is the lowest figure we have seen in recent years by quite some margin," said Elford.
Before 2008 the lowest turnover was in January 1992 when 4427 houses were sold.
"It's clear evidence that people are treading cautiously and reflects the uncertainty of the wider economic environment," Mr Elford said.
Falling interest rates had yet to revitalise the market.
Another worrying trend was the length of time being taken to sell a house, reaching a national median of 59 days last month, compared to 49 in January 2008 and 45 days in December, Elford said.
The number of days taken in January was the most since January 2001 when houses took on average 64 days to sell.
The time taken to sell properties in January was affected by the Christmas break, and the month was regularly the slowest month in sales numbers.
Taranaki was the only region not to have a drop in median house prices last month, with a rise of 1.4 per cent to $266,750.
The biggest drops were in Southland, which fell 22.2 per cent to $175,000, and Northland down 16.2 per cent to $275,000.
ASB chief economist Nick Tuffley agreed that lower interest rates were having little impact yet in reviving the housing market, and he expected any impact to be modest.
Job security would be a growing concern for prospective buyers, while deposit criteria had also raised the bar.
The biggest impact of low borrowing rates would be through easing of cashflow pressures on existing borrowers, said Tuffley.
But sales turnover had been relatively flat since mortgage rates began declining in the second quarter of 2008, so at the least lower rates appeared to have put a floor under sales activity.
"This in itself is a positive, though turnover needs to pick up on a sustained basis to signal that the market is starting to turn."
Tuffley said that on a seasonally adjusted basis sales in January were sitting near the average for the second half of 2008, unwinding much of a jump seen in December.
ASB expected house prices would continue to gradually fall during much of 2009.
- NZPA
