Up or down? Housing experts see it both ways

Some economists are calling it the bottom of the housing market.

But an Auckland valuation and property consultancy has found expensive places selling at discounts and the luxury mansion market still in the doldrums.

BNZ chief economist Tony Alexander said he had predicted last year that people wanting a good deal should have bought by now.

"If you were planning to make a canny purchase in the housing market to take advantage of the downturn, you should get it done before the middle of this year.

"By then the excess supply would be largely cleared out and the best bargains soaked up."

Westpac's economics team, led by Brendan O'Donovan, said the darkest days of the recession were behind us.

Fewer New Zealanders were leaving to live in Australia and the New Zealand economy had turned the corner after 18 months of misery.

"The residential construction industry would be first to benefit from the influx of people with rapid growth next year," Mr O'Donovan said.

"Other potential beneficiaries include homeowners who will be happy to see the end of declining house prices."

High levels of unemployment and weak exports would keep our recovery modest, he predicted, but he also cited an acute housing shortage as another contributing factor.

Valuation business Sheldons took a dimmer view, listing a slew of mansions going for less than they once fetched.

Houses in the $1 million-plus category mostly fetched less this year than at the height of the boom about four years ago, their figures showed.

Sheldons believes the only true way to get a gauge on the market is to measure sales of one property with its later resale.

Only that way, it says, can people really see whether prices are rising or falling.

Sheldons director Gary Brunsdon said prices being paid now for mid-quality Auckland houses were much the same as they were around late 2006, near the peak of the market.

"Home affordability - house price and mortgage cost relative to income - has improved significantly and listings remain in short supply, underpinning prices and encouraging stronger buyer competition," Mr Brunsdon said.

Quotable Value this week issued an index showing New Zealand house prices fell 1 per cent to the lowest for more than two years in the first quarter of this year.

That followed a 2 per cent fall in the last three months of last year, QV said, and was the fifth consecutive quarter in which the index had fallen.

William Cairns and James Lockie of Auckland mortgage business General Finance said housing was certainly showing signs of improvement.

But other areas of real estate were not.

The commercial and office leasing market was in the doldrums and farm sales were slowing.

Harcourts said this week it had sold a third more property last month than it did in June last year.

"The largest increases in written sales were in Harcourts central region. [There] we recorded a 58 per cent increase on June 2008, followed by the northern region, which was 51 per cent up," said chief executive Bryan Thomson.

"[The] Christchurch region had a 34 per cent increase and the Wellington region recorded 29 per cent more."