House prices slipping as sales dive

House sales throughout the country are at a record low - and sellers need to have realistic price expectations to get results, Harcourts chief executive Bryan Thomson says.

The company's figures from last month show average house prices have dropped by tens of thousands of dollars, excluding Auckland which has increased by more than $30,000.

In Wellington, average prices fell from $346,000 in January 2008 to $314,000 last month.

The worst affected was the central North Island, which suffered a 16 per cent drop in average prices (down almost $70,000). The lower South Island had a 4 per cent decrease ($12,000).

Mr Thomson said figures from the industry revealed the lowest number of sales recorded in recent years.

And though new listings in Auckland, especially those at the upper end of the price range, remained at a premium last month, they were poorer than expected.

"What is already becoming clear is that many sellers, particularly new ones coming on to the market, are more in tune with where their price expectations need to be and are achieving success," he said.

"In contrast, sellers who refuse to recognise or accept the changed environment continue to languish."

Figures for December and January were known to fluctuate and February's figures - due next month - were expected to be more accurate.

While real estate agents had hundreds more properties available for sale last month, compared with January last year, the number of sales was down significantly.

Lending conditions for first-home buyers - with 20 per cent deposits now required by most banks - were a contributing factor, Mr Thomson said.

"During 2009 we expect to see the volume of sales slowly recovering from the abysmal levels we have been experiencing, as lower interest rates and tax relief kick in and more buyers seize the day."

- © Fairfax NZ News