KEY POINTS:
Figures from real estate firm Harcourts New Zealand showed sales dropped heavily in January but prices held up.
Sales volumes declined in four of its five regions when compared with the same month last year, with the northern region the worst hit, down 51 per cent.
The Wellington region was the only exception, recording a seven per cent increase. Price rises there were the lowest, only keeping pace with inflation at 3 per cent.
Average prices continued to increase in all of its regions when compared with the same month last year, despite the amount of property for sale.
Northern region prices were up 16 per cent on average on a year ago at $506,000 while central region prices were up 46 per cent to $448,00.
Harcourts chief executive Bryan Thomson said January was a difficult month to judge trends from because of holidays.
"All we know is that during the last quarter of 2007 we saw widespread negative rhetoric about the real estate market, multiple interest rate rises and the woes of key overseas financial markets all impacting on people's confidence and slowing down the real estate market."
He said sellers had to have realistic price expectations as the rapid escalations of recent years were not occurring now.
- NZPA