Fewer houses selling and prices stay flat

Auckland housing. Photo / Supplied

The house sale sector remains bleak, with agents reporting fewer deals and flat prices.

Real Estate Institute figures show 4287 unconditional unsettled sales in August, down on July's 4411.

The national median price was $350,000 from July's $349,000.

REINZ spokesman Bryan Thomson said the prices were still $20,000 up on what they were two years ago.

The length of time taken to sell a housewas stable and buyers were being frustrated by sellers holding off from listing, Mr Thomson said.

However, Shamubeel Eaqub of the Institute of Economic Research said the real problem was a lack of buyers. Sale volumes had fallen for four consecutive months.

"House sales fell by 3.3 per cent in August and are down 27 per cent from last year and are similar to the awful weakness two years earlier," Mr Eaqub said. But prices had not collapsed during the recession and houses remained over-valued.

"For an owner-occupier, renting is a cheaper option for a comparable home. For investors, mortgage payments are higher than rental income before other expenses like insurance, rates and maintenance.

"Recent tax changes mean even depreciation offset is not available to reduce this cash loss.

"The outlook for housing remains downbeat. Households are paying down debt, spending less and making do with less. Until economicgrowth returns, new hiring picksup and wages accelerate, realestate agents will do it tough."

ASB's Chris Tennent-Brown said figures showed subdued activity. Median days to sell remained high at 44 days on a seasonally adjusted basis, reflecting a market that remained tipped in the favour of buyers, he said.

"During 2008, when the housing market was particularly weak and prices declined around 10 per cent, median days to sell stretched out to 57 days. We do not expect the market to soften to that degree, but expect conditions to remain tipped in favour of buyers."

He expected house prices would come under pressure and fall around 3 per cent over the next year.

MEDIAN HOUSE PRICES

July August

Northland $307,300 $310,000
Auckland $450,000 $445,000
Waikato/BOP $315,000 $323,000
Taranaki $292,000 $265,500
Hawkes Bay $265,000 $272,500
Wellington $385,000 $397,000
Christchurch $328,000 $335,000
Dunedin $259,000 $245,000
NZ $349,000 $350,000

Source: Real Estate Institute of NZ