Mortgage lending restrictions continue to hit the lower end of the property market, new Real Estate Institute (REINZ) figures suggest.
Nationwide house sales rose 15.9 per cent to 6572 in May, from the previous month, but down 14.8 per cent from May last year, according to the latest figures from the Real Estate Institute (REINZ).
The number of sales below $400,000 fell by 25 per cent year-on-year in May, following a 31.6 per cent drop in April.
"This may be indicative of fewer sales in the lower price brackets since the imposition of the LVR restrictions," REINZ said.
Tougher low-deposit limits introduced in October last year restrict banks' lending to buyers with less than a 20 per cent deposit.
May is typically the third-strongest sales month after March and November, but seasonally adjusted sales were up only 1.6 per cent compared to April and down 12.6 per cent compared to May 2013.
All regions sold fewer houses than a year ago with Taranaki recording the largest fall of 34.8 per cent, followed by Wellington with a fall of 19.9 per cent and Otago with a fall of 19.3 per cent.
Houses took an average of 38 days to sell in May, four days longer than April and three days longer than May last year.
REINZ chief executive Helen O'Sullivan said the easing trend in the number of sales continued in May.
"We would normally expect an increase in sales in May compared to April, however, after taking seasonal factors into account the increase was just 1.6 per cent," she said.
"This leads us to conclude that the drop in sales in April due to the combination of Easter and ANZAC Day has not created an offsetting increase in sales in May."
The national median house price was $430,000 in May, down $2250 (0.5 per cent) from April but up by $38,000 (9.7 per cent) from May last year.
Canterbury/Westland saw the biggest 12-monthly increase, with the median price up 15.3 per cent to $415,000, followed by Auckland with a 10.6 per cent increase to $640,000.
The REINZ Stratified Housing Price Index, which adjusts for changes in the composition of house sales, fell 1.2 per cent compared with April to sit at 3925.1. It was up 6.5 per cent for the 12 months to May.
The Auckland index fell 3.1 per cent in May, Christchurch fell 2.3 per cent, and Wellington fell 4.8 per cent.
For the 12 months to May, Auckland rose 9.4 per cent, Christchurch rose 9.0 per cent and Wellington rose 1.1 per cent.
O'Sullivan said the Auckland and Canterbury/Westland regions were the driving force behind the nearly 10 per cent increase in the national median house price over the past year.
"Together these two regions represent almost 53 per cent of all sales, but contributed 76 per cent of the uplift in the median price," she said.
"Other regions such as Hawkes Bay, Manawatu/Wanganui, Wellington, Central Otago Lakes, Otago and Southland contributed just 6 per cent of the uplift in the median price, despite representing almost 25 per cent of the national sales total."