KEY POINTS:
House sales are taking a hammering as prices and volume fall but one expert thinks the true picture may be even worse.
Real Estate Institute members' January sales volumes were the lowest since 1992, figures released yesterday show.
The national median dropped from $328,500 in December to $325,000 last month and days-to-sell pushed out from 45 days to 59.
Just 3706 houses were sold nationally in January, a 28 per cent fall from January 2008 when 5186 houses sold.
Seasonally adjusted prices fell 1.1 per cent between December and January but 4.4 per cent for the full year to January.
Shamubeel Eaqub, Goldman Sachs JBWere's investment research director, said vendors were whipping listings away from one agency and giving them to another in a bid to sell.
This may be disguising just how poor the market really is and skewing the figures, he thinks.
"The housing market remains very weak and there is little evidence to suggest recent sharp declines in mortgage rates have had any benefit yet," Mr Eaqub said.
"However, improved affordability should provide some support and we are initially looking for a stabilisation in volumes as evidence of traction. We believe significant interest rate cuts and escalating fiscal stimulus should eventually support the economy."
Robin Clements of UBS was concerned about house-selling timeframes. "There is a worrying jump in days-to-sell but this could be seasonal and besides, prices were flat. The bottom line is that it's not obvious housing has reached a trough in activity or prices but at least the latter is not spiralling down."
Real Estate Institute president Mike Elford said he was concerned about the low turnover. "It's clear evidence that people are trading cautiously and reflects the uncertainty of the wider economic environment."
Falling mortgage interest rates were having little effect, not revitalising the market as expected. But Mr Elford also stressed that January was usually agents' slowest month.
All provincial areas except Taranaki (up 1.4 per cent) recorded price drops.
In the greater Auckland area, North Shore prices rose from $490,500 in December to $507,500 in January and prices in Rodney went from $457,000 to $485,000.
Falls were recorded in Waitakere ($375,000 to $352,500), Auckland City ($490,000 to $458,500), Manukau ($431,000 to $408,000), Papakura ($358,000 to $303,500) and Franklin ($381,500 to $367,000).
Barfoot & Thompson director Peter Thompson said price drops had only been marginal in the Auckland and northern area where he operates.
The market was not as bad as people thought, he said, citing a Manukau property with a pre-auction offer of $870,000 which sold under the hammer for $1,030,000 - $160,000 over the reserve.
