House prices fall below $400k

A record low number of houses are for sale, creating a sellers' market this summer, says industry website

Fewer than 1000 new properties were listed for sale in Canterbury in December, a fall of 4 per cent on December 2011 but a dramatic 35 per cent plummet from the 1475 houses newly listed during November.

Nationally, new listings fell 2.9 per cent, with about 8500 properties put on the market in December.

House prices in Canterbury have eased, with the average asking price falling under $400,000 for the first time in three months.  

In Canterbury, the average asking price dropped 4.1 per cent last month, from $414,070 in October to $389,273.

In December 2011, the average asking price was $370,736. marketing manager Paul McKenzie said that between May and July last year the average asking price in Canterbury was about $390,000.

''Then it jumped up over $400,000 and carried on that way in both October and November, so the drop for the asking price in December really does show that things are stabilising in that region,'' he said.

"Following the record high asking prices recorded over the previous two months, [nationally] questions of housing affordability were naturally coming into the frame.

"However, buyer demand is still clearly strong, so seller confidence is likely to remain high for some time to come."

McKenzie said new listings were usually down in December but had plummeted 37 per cent from the previous month and 3 per cent on an annual basis.

He said the tight inventory would continue to tilt the market firmly in favour of sellers.

 The "inventory of listings", or the number of weeks it would take to sell all the homes on the market, sunk to a seasonally adjusted 27 weeks in December, compared with a long-term average of 39 weeks.

In Canterbury, this fell to 18 weeks, on a par with Wellington but longer than Auckland's 14 weeks.

Sixteen of the 19 regions across the country saw falls in property availability, with Auckland undergoing its worst drought in the five years since records began.

The country's largest property market registered a new low of 14 weeks of housing stock, down 11 per cent from the previous month and 43 per cent on the same time last year.

Record lows were also seen in Otago (20 weeks) and Waikato (32 weeks), despite a surge of new listings towards the end of last year.

Because of the limitations of the small sample size and seasonally adjusted data, ASB senior economist Jane Turner interpreted the figures with greater caution than usual.

"Nonetheless, the results suggest the housing market has potentially tightened further in December, with supply failing to respond to the increase in demand over 2012," she said.

Turner said the Reserve Bank would not be able to tolerate the momentum in house prices and credit growth for much longer.

There was a "growing possibility" that it would step in with macro-prudential tools, such as limits on lending, to ease pressure in the housing market, she said.

The Press