The number of properties sold across New Zealand fell by 17 per cent last month, with prices also falling from December.
Figures released this morning by the Real Estate Institute of NZ show that the national median price fell $25,000 or 5.8 per cent from December. When compared to the same month last year, sales fell 4.3 per cent and median prices were up 8.6 per cent.
Auckland sales volumes plunged 21 per cent from December, with prices down 5.2 per cent.
Institute chief executive Helen O'Sullivan said there were a number of factors at play in the market during January, including seasonal factors and the ongoing impact of restrictions on low deposit lending.
O'Sullivan said today's figures did "suggest a softening price trend, which would come as a relief to many commentators. However January data is often impacted by the seasonal mix of properties, with fewer high value properties coming to market in this month."
The Stratified House Price Index, which adjusts for some of the mix of different houses sold in a particular month, fell 2.2 per cent compared with December last year.
Auckland wasn't the only city to see double digit falls in the number of properties sold, with the number down 24 per cent in Wellington and 25 per cent in Christchurch when compared to December sales.
ASB economist Daniel Smith said the REINZ data was "another piece of evidence that pressures in the housing market may be starting to ease slightly."
Activity did pick up (in seasonally-adjusted terms) after a lull in November and December.
"Sales volumes in both November and December were low, and it seems that the introduction of the RBNZ's LVR restrictions in October may have created hesitation amongst both buyers and sellers. January data from REINZ, Barfoot and Thompson and realestate.co.nz all suggest that people are returning to the market in January. "
"The evidence suggests that annual price gains in Auckland peaked in late 2013. Since then, annual house price growth has slowed from 17 per cent to around 14 per cent. And the median days to sell a property has lengthened from 30 to 34 - the longest since April 2012," said Smith.
"If sustained, that points to a further slowing in price growth over coming months. Average days to sell have also eased in other regions, but not to the same extent. The exception appears to be Wellington, where lower days to sell point to a tightening in the housing market (although price growth remains very low for now)."
Smith said that with growth and inflation picking up, an OCR hike in March looked "a near certainty."
"The question is how rapidly rates will rise from there. A slight easing in housing market pressures suggests that house price growth may undershoot the Reserve Bank's most recently published forecasts. We continue to expect a fairly gradual cycle of OCR increases."
ANZ economist Mark Smiih said that seasonally adjusting the numbers showed sales volumes increases in most regions, with numbers broadly unchanged in Auckland.
"While the tight inventory of existing dwellings on the market continue to support prices, our estimates suggest that the slowdown in volume growth is starting to impact on prices."
"The housing market has been supported by housing shortages, high net immigration and low (but rising) mortgage rates. The Reserve Bank remain confident that the High LVR Speed Limits will help to slow house price inflation, with the REINZ data partly supporting this. OCR rises are coming, nonetheless."
"Climbing housing construction and pending increases to mortgage interest rates will eventually help reduce pressure on prices, but the Reserve Bank are likely to remain vigilant given the financial stability and inflation risks posed by the buoyant Auckland property market," said Smith.
REINZ real estate stats for January:
• 4,719 dwellings sold in January 2014, down 4.3 per cent on January 2013
• National median price eased $25,000 to $402,000 (-5.8 per cent) from record high set in December
• Nelson/Marlborough reached a new high median price
• More than 1 in 5 sales were by auction in the 12 months to January 2014
more to come