House sales plummet in March

House sales plummeted in March, but with the fall strongest at the lower end of the market the national median price actually increased.

Figures out today from the Real Estate Institute (REINZ) put the number of residential property sales in March at 5129, compared with 6356 in February and less than half the 10,989 sales in March 2007.

It was also lower than the January 2008 sales figure of 5186 -- a period affected by the summer holiday period.

The national median price was up from $337,500 in February to $349,000 in March, with an annual increase of 1.6 percent from the $343,500 in March 2007.

REINZ national president Murray Cleland said that while confidence, especially in the bottom end of the market, appeared to have fallen, the earliest Easter in years also had a part in the drop in sales.

Sales of properties worth under $400,000 fell 23.2 percent, compared to the overall sales drop from February of 19.3 percent.

The 3125 March sales of properties worth under $400,000 was 60.9 percent of the total, compared with 64 percent in February and 62.2 percent in March 2007.

The lower end of the market was likely to be more affected by confidence issues and particularly some of the recent headlines, while the upper end of the market had relatively more resilience, Mr Cleland said.

Sales from $400,000 to $599,000 were down much less, from 1472 in February to 1240, while in the $600,000 to $999,999 category sales were down from 642 to 614. Over $1 million sales were down from 174 to 150.

The sales pattern had given the market a reprieve from moving into negative figures, he said.

A glimmer of hope was that days to sell fell nationally from 50 in February to 40 in March, but that compared with 27 in March 2007, and the balance of probability was that the market would weaken in coming months.

Of the 12 regions covered, median prices fell in seven, rose in four and were unchanged in one, Mr Cleland said.

The unusual factors in March could not hide the fact that in many parts of the country prices were weaker.

The likelihood that a growing number of properties would come on the market either through bank-forced sales, or through the collapse of property investment schemes, would put more pressure on the market, he said.

Northland provided a classic example of the impact of low sales, especially at the lower end of the market, on median prices, with the median up from $284,000 in February to $325,000, but sales down from 184 to 153.

The Auckland region median rose from $427,000 to $437,500, largely driven by a fall in cheaper property sales in Auckland City, and a drop in sales from 1772 in February to 1621 in March, less than half the March 2007 sales for the region of 3884.

Metropolitan Auckland sales were 1428, down more than 2000 on the March 2007 figure of 3446.

Elsewhere around the country the pattern was the same with medians unpredictable because of the low sales.

- NZPA