KEY POINTS:
The number of house sales is plummeting but prices are staying firm, early figures for last month show.
Sales at Auckland's biggest real estate agency group, Barfoot & Thompson, dropped 50 per cent last month from April last year to 453 - the slowest turnover since December 2000.
Despite the slowdown, the agency's average sale price stayed relatively stable, falling 2.2 per cent to $520,380, more than the March quarter average of $511,740.
House prices have been predicted to fall for a while, with Bank of New Zealand economists forecasting a drop of at least 10 per cent before prices improve.
But vendors appear to be hanging on for the price they want, despite a growing glut of sellers.
In March, house sales dropped 50 per cent compared with the same time last year. But Barfoot & Thompson managing director Peter Thompson said most sellers could afford to wait it out. "I don't think you're going to find a huge change in prices because New Zealanders don't like losing money," he said.
"If they're going to do anything they're just going to take [their houses] off the market until it comes right."
Thompson said reports prices could fall by as much as 30 per cent were "outlandish". "We believe the real estate market is still good. We have a lot of buyers out there still looking for properties, although there is more choice for buyers because of more properties being on the market."
But Kieran Trass, founder of market monitoring site SuburbWatch, said the relatively small price drop in the Barfoot and Thompson figures was not a sign the market was bouncing back.
"This story is going to take a long time to play out. Some people have a buffer from the last five years of strong growth and a lot of people are still on fixed interest rates with their mortgages."
Mr Trass said about a third of people on fixed interest mortgages were due to come off those rates in the next 12 months, with another third due to come off in the 12 months after that.
Mr Trass said prices would fall by at least 10 per cent by the end of the year.
"Some suburbs in Auckland have already gone back 5 per cent since the start of this year. Property values are back to where they were a year ago ... Any gains people have had in the last year are gone already."
Mr Thompson said even with prices holding, owners expecting a windfall would be disappointed.
Barfoot & Thompson generated 39 per cent of Auckland housing sales in March. The agency is the first to publish figures for the housing market for April.
The Real Estate Institute of New Zealand's figures are due at the end of this week.
BARFOOT & THOMPSON SALES
* Dropped 50 per cent last month compared with April 2007.
* 453 sales.
* Slowest turnover since December 2000.
* Prices staying stable.
