KEY POINTS:
The Government is not expecting a property crash, Prime Minister Helen Clark says.
Recent figures from the Real Estate Institute (REINZ) suggest the market is now in a downturn with prices dropping slightly in some areas and houses taking longer to sell.
Some housing market commentators have suggested the worst is yet to come, with some picking a fall as big as 30 per cent over three years.
But Miss Clark said that did not line up with the official advice she was receiving from Treasury.
"I haven't seen predictions anything like that," she told reporters.
"In fact the advice we had ... was that a fall of anything like that magnitude was very very unlikely and that the affordability issue was unlikely to be impacted very much at all by what was likely to happen to house prices."
REINZ's figures show 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.
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.
- NZPA
