KEY POINTS:
Residential property became a "buyers' market" last month with low sales and a sharp increase in days to sell figures, the Real Estate Institute (REINZ) says.
The national median price dropped to $340,000 in January, from $345,000 in December and compared to a peak price of $352,000 in November.
The national median was 3.97 per cent up on the $327,000 figure in January 2007.
REINZ said sales last month were unusually low, even for January which was traditionally a weak month.
The 5186 sales last month were the lowest for a January since 2001, and compared with 7566 in January 2007 and 5597 in December 2007.
New Zealand Mortgage Brokers Association chief executive Megan Salt said there was no doubt that the market is slowing.
"That's what we're hearing, obviously the property market is not booming, it's not in a boom phase," Ms Salt said.
She said for the brokers who had a strong client base, it was "business as usual" but for those reliant on new customers, it could be harder.
Days to sell increased to 49 days nationally, the highest since the January 2002 figure of 54 days. In January 2007 the average number of days to sell was 38, while in December it was 36.
REINZ national president Murray Cleland said the latest figures suggested prices were going backwards, although January was the worst month for such interpretations because of its unusual nature.
"But it is clear from the days to sell and low sales volumes that there is a growing tension between the prices vendors are seeking and what buyers are asking," he said.
"Buyers have been quick to sense that the market is weakening and they are ready to take advantage of that situation."
The abnormally low sales figures were more of a concern than median prices, in some ways, because they showed the market's liquidity had reduced significantly and logically that would have an impact on prices, Mr Cleland said.
People needed to be prepared for prices to move back in 2008 which may have consequences for those who were heavily geared, particularly those with multiple rental properties at a time of rising interest rates.
In the Auckland region, the median price fell from $460,000 in December to $432,750 in January.
But Mr Cleland said that was more likely to be a skewing of figures caused by low sales volumes, with the Auckland City median falling from $510,000 in December to $433,000.
Northland's median fell from $335,000 in December to $328,000 in January, while in Waikato and the Bay of Plenty the median dropped from $330,000 in December to $320,000 in the latest month.
Hawke's Bay went against that trend with an increased median of $280,000 compared with $273,267 in December.
Manawatu/Wanganui slipped from $244,000 to $230,000 but neighbouring Taranaki saw a small increase in its median from $260,000 to $263,000.
Wellington slipped back from $370,000 to $366,750, while Nelson/Marlborough was up from $338,000 to $340,000.
Canterbury/Westland slipped from $315,000 to $310,000, while Central Otago Lakes was typically unpredictable being up from $419,000 to $476,500, despite the dubious honour of having the highest regional days-to-sell figure of 73 days, REINZ said.
Otago was down from $250,050 to $235,000 and Southland burnt all the other regions off with an increase from $191,000 to $225,000.
On an year by year percentage basis, Southland continued to lead with a 44.23 per cent annual median price growth, followed in a distant second place by Nelson/Marlborough on 10.74 per cent with Central Otago Lakes third on 10.24 per cent. They were well ahead of the major centres such as Auckland on 4.27 per cent and Wellington on 4.22 per cent.
- NZPA
