by Peter de Graaf and Rosemary Roberts
Northland property prices have plummeted by 16 per cent in the past year - the second biggest drop in the country - with some top-end properties shedding as much as $1million from the asking price.
The slowdown in the number of sales is just as dramatic with 83 homes sold in Northland in January, compared with 134 a year earlier. It's a far cry from the heady days of five years ago - in January 2004, 287 homes changed hands.
But buyers out for a bargain may be disappointed.
Real estate agents say sales might be slow, but interest in homes at the bottom end of the market is starting to pick up again.
Barry Joblin, owner of the Professionals Whangarei, said any bargains were at the luxury end of the market, bare sections, or the odd mortgagee sale.
But at the bottom end investors and first-time buyers were starting to return as lower interest rates made mortgages affordable again.
At the end of January the Reserve Bank slashed its official interest rate to 3.5 per cent, well down from the giddy peak of 8.25 per cent in 2007-08. Interest rates were likely to fall further in coming months, Mr Joblin said.
An "awful lot of buyers" out for a bargain were making offers $50,000 below the asking price, but few were getting their way.
"I've been in this business 25 years, and the only thing that's extraordinary now is how slowly property is selling ... The interest rate dropping makes it easier for vendors to hold on. We're not seeing panic selling."
Mr Joblin expected prices would stabilise this year, but a rise was unlikely for the next 18 months.
"Traditionally the bottom end of the market moves up first and we're definitely seeing that now. Right now 80 per cent of our sales are under $300,000."
It was worth remembering that the recent slide in values came after property across New Zealand had gone up by 120 per cent in the previous five years, he said.
Bayleys Whangarei general manager Shannon Henson said his company has not seen a further slide this month and believed prices had stabilised. "Investment buyers are 'in the rooms' but they're looking, not buying yet. They seem to be thinking the figures might now stack up whereas a few weeks ago they wouldn't have, before interest rates started dropping. It's really heartening to see them back in the market."
Allan Sykes, a principal of Allens, also reported stronger enquiries - but buyers were still cautious and sales volumes low.
"The drop in interest rates has brought a glimmer of light," he said.
Allan Inglis, of First National, said property values in Whangarei had dropped by about 30 per cent compared with late 2007, but the market was changing month by month.
The comforting news was that anyone buying and selling in the same market would not lose out. "If anything it's a perfect time to buy a house."
Grant Murray, of LJ Hooker Whangarei, said vendors could expect cheekily low offers - but shouldn't reject them out of hand.
His advice was consider every offer, get it in writing, and treat it as a starting point for negotiations.
Only Southland, at 22 per cent, saw a bigger drop in median sale price than Northland in the year to January 2009.
Auckland prices slipped 2.5 per cent; Taranaki was the only region where the median sale price increased, by just under 1.5 per cent.
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