KEY POINTS:
The 10-year rollercoaster of Auckland house prices has turned into a downward spiral for many areas - but others are on the rise.
Last year's price peak and this year's subsequent decline showed up after the Weekend Herald took the latest sales figures from the Real Estate Institute and compared price changes during the past decade.
The chart shows the very low base for prices back in October 1998, the big climb in the following six to eight years and then this year's drop.
But many Auckland suburbs had price rises in the past year.
Although Mt Eden was down from $707,000 to $580,000 between September last year and September this year, the latest figures showed prices there rose by $80,000 when the October months were compared.
Same for other areas. Devonport prices were up by $116,000 from last October, Waitakere's up $105,000, Albany's up $17,000, Upper Harbour's up $74,000 and Henderson's up $21,000.
But prices in areas such as the prime eastern suburbs fell $25,000 in the year, as they did in a large number of other areas.
The institute was chipper this week about the latest data, highlighting the fact that the Auckland and national medians were up: $420,000 to $433,000 and $330,000 to $335,000 respectively.
Economists generally dislike monthly price comparisons because they say they do not reflect the longer-term trends.
One economist has also questioned whether the latest figures are even reflective of how serious the downturn is. Goldman Sachs JBWere (NZ) investment research director Shamubeel Eaqub said it looked as if house prices were falling faster than the institute's data were picking up.
"I am still very concerned about housing. There appears to be a large inventory of homes for sale. Net migration has dwindled to practically nothing, meaning there is no support from this source. Rents are stagnant or declining, meaning investors are unlikely to be in the market, given the prospect of capital losses.
"Owner-occupiers are probably worried about capital losses too, not to mention job losses - which by the way hasn't even started yet, but will likely do so in the next six to nine months. Throw in the added constraint of tighter credit criteria and it all gets very hard."
Banks requiring 20 per cent equity rather than 5 per cent meant 80 per cent loans rather than 95 per cent loans, Mr Eaqub said. This would mean buyers would have to come up with $17,000 to $67,000 and he questioned how many New Zealanders had that much in cash savings.
"That would shrink the pool of potential buyers: lots of supply, very little demand and laws of economics suggest prices must fall."
BNZ chief economist Tony Alexander was a little more optimistic and said the national median price was the best since July. "We don't for a minute take the small monthly improvement to indicate house prices are picking up again because after all, monthly measures can move all over the place.
"But the fact that there has been a recent downward trend in this price measure leaves us feeling a bit more confident in our comment that we do not face a house price collapse scenario in New Zealand, although there remains scope for maybe another average 5 per cent to 8 per cent decline in prices from current levels," Mr Alexander said.
Realestate.co.nz chief executive Alistair Helm is concerned.
"The latest sales figures show a very subdued level of activity - just 4469 properties were sold across the country in October, traditionally a strong month for sales as seasonal spring activity initiated in August and September culminates in strong sales in October and November before the onset of the Christmas period. The year-to-date sales total 47,547, some 40 per cent down on the same period to October 2007," Mr Helm said.
Barfoot & Thompson's sales last month showed the average sale price rose from $495,873 to $520,039. QV data out this week showed house prices fell 1 per cent nationally last month, taking the annual decline to 6.8 per cent.
