The Real Estate Institute of New Zealand provided information on Thursday showing that the drop in housing sales in January could be the start of prices dropping here. Currently, New Zealand is facing a large shortage of affordable housing and has been named the most expensive country to purchase property in.
January has traditionally been a slower monthly for house sales, mainly due to the holidays. Yet this past January was very slow with only 5186 homes selling. This number is the lowest since January of 2001. In January of 2007, some 7566 properties were sold – up from 6360 in 2006 in the same month.
Because property is taking longer to sell, the national median price dropped from $345,000 in December of 2007 to $340,000 in January of 2008. Additionally, the number of days it took to sell the property rose to 49 days. This is the highest peak since January of 2002 when it took 54 days.
The housing market in New Zealand is slowing and many believe it is moving towards a buyer's market. While property prices falling is not a good move, it may help to bring in more affordable housing in a country where there is little.
The government is also working to improve that situation by helping to increase the amount of lower and middle income properties available through specialized programs. This would be particularly beneficial to first time home owners who are struggling to buy their first home.