Sellers pull their houses from sale as prices drop

NO SALE: Sellers are pulling their houses from the market as prices drop.

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House prices have eased slightly in the past few months, leading sellers to withdraw from the market instead of dropping the asking price.

Quotable Value said the average price of a house in New Zealand was $409,700 at the end of July, a drop of 1.1 per cent since the end of March.

Prices had been rising at the start of the year and remained 3.1 per cent up on a year ago, but were down 5 per cent since the peak of the market in 2007.

QV valuation manager Glenda Whitehead said the number of houses being sold was well below the long-term average, as sellers opted to wait for the market to pick up.

"There is still a considerable backlog of unsold property on the market, although the number of new properties being added to this pool appears to have slowed as potential vendors choose to wait until the market begins to show signs of recovery," Ms Whitehead said.

"Those with properties currently on the market now accept that they will take longer to sell, though they are not dramatically dropping their asking prices."

Registered valuer Kerry Buckeridge said prices were softening in the capital and sales volumes were "modest", though the top end of the market remained stronger.

"It appears as though buyers in this segment recognise that properties of this quality do not come to market too often. If they want this type of property, they are acting."

Though there had been signs of an increase in listings, typically seen in spring, Mr Buckeridge said it appeared that owners were focusing on paying off their mortgages, rather than upgrading.

"This conservative financial stance may be driven by the ongoing cost-cutting and restructuring within the public service sector. Even if there has been no direct effect on individual circumstances, many are playing it safe and battening down the hatches."

House prices had dropped 1.5 per cent in Wellington city and the southern suburbs in the past 12 months, but rose everywhere else in the region, with Kapiti Coast up 5 per cent on a year ago.

Auckland experienced the largest rise in value in New Zealand in the past 12 months, climbing 5.9 per cent to an average of $535,918, QV said.

In the Wellington region, QV said property values had fallen 2.2 per cent since the end of March to $455,144. The average price of a house in Wellington was now just 2 per cent above a year ago and 5.4 per cent below the peak of 2007.

Values in the Queenstown Lakes area had dropped by 1.5 per cent in the past 12 months, but the region was still the most expensive in the country at an average price of $578,799.

- © Fairfax NZ News