The volume of national housing sales have slumped a record more than 40% during the first half of the year - surpassing a 1974 record low - with Otago, Central Otago and Southland among several provinces or regions forecast to have the largest house price falls by June next year.
The findings are from an Infometrics survey for QBE Lenders Mortgage Insurance (formerly PMI Mortgage Insurance Ltd), a mortgage insurer and residential property market specialist for more than 42 years in Australia and and 20 years in New Zealand.
QBE chief executive Ian Graham said the "Residential Property Overview - New Zealand" survey revealed New Zealand property sales volumes had slumped 44.3%, when compared to the same period in 2007, which exceeded the previous record decline of 39.4% set in the second half of 1974.
"The impacts of higher interest rates, economic recession, increases in food and fuel prices and drought pressures affecting the nations agricultural industry have been attributed as catalysts for the slowdown," Mr Graham said in a statement yesterday.
In other separate surveys, Quotable Value recently said national house values were down 6.8% on a year ago while the Real Estate Institute of New Zealand reported a national decrease in values of 4.28% from a year ago, however five out of 12 regions recorded an increase in property sales values.
The institute said there had been a drop in October turnover of 34.7%, with 6854 sales in October 2007 compared with 4469 sales this year.
There has been a recent deluge of negative national and regional economic data, but Mr Graham said with Reserve Bank interest rates going down, a pick-up in business and consumer confidence, and house sellers revising price expectations, sales volumes were expected to recover from their current low level.
"More buyers are likely to be drawn back into the market in 2009-2010 in search of housing bargains," Mr Graham said.
Infometrics senior economist, Gareth Kiernan, said the annual price decline was the first across New Zealand since 2001 and the annual growth in the median house price could dip as low as -10% in early 2009 and nationally, prices were forecast to fall 5.8% by June 2009.
However, the most pronounced falls by June 2009 were expected to be Otago-Southland (-9.5%), Northland (-9.1%) and Nelson-Marlborough (-7.6%) while the smallest declines were expected in Christchurch (-3.3%) and Hawkes Bay (-3.2%), Mr Kiernan said.
Otago-Southland house prices, as an overall region, had grown the fastest in the year to June 2008 at 6.6%, Central Otago 9.2% growth and Southland 15%, but for the year to June 2009 they were forecast to reverse to -9.5% for Otago overall, -12% in Central Otago and -17% for Southland.
