Median prices and house sales were down in Otago last month, in common with most of the country, but this did not signal doom and gloom in the southern market, Dunedin district Real Estate Institute president Stephen Johnston said.
The South was not seeing mortgagee sales to the same extent as areas such as Waiheke Island, although "even one of them is too many for the poor people involved", he said.
He believes this month's sales will be higher, with buyers both in New Zealand and Australia showing renewed interest in purchasing rental properties as a result of lower interest rates.
The January sales results released by the institute showed nationally sales for the month at 3706 were the lowest January sales since 1992, when 4427 houses sold.
They were lower than last December sales of 4302, and 1480 lower than the sales for January 2008.
Only Manawatu-Wanganui and Taranaki recorded slightly higher sales in January than in December.
None of the 12 districts had higher sales this January than last January, and Taranaki was the only region which had a higher median house price last month, when compared with January last year.
In Queenstown, which is included in the Central Otago lakes district, sales were steady.
Forty-three houses sold this January, with the median price at $560,000, $110,000 higher than December when 44 houses were sold.
In January last year, 41 houses were sold; the median was lower at $585,000.
The Central Otago lakes district and Southland were among five districts which recorded higher median prices in January than in December.
The median price in Central Otago lakes was $457,500, compared with $427,500 for December, but this January's figure was $19,000 lower than last January's.
In Southland, the corresponding figures were $175,000 for January, $166,000 for December and $225,000 for January 2008.
In Otago, 194 houses were sold in January, 27 down on December's total.
The median price was $210,000, compared with $230,000 for December and $235,000 in January 2008.
While the percentage drop in median house prices in Otago (10.63%) and Southland (22.22%) from last January to this was among the top four in the country, Mr Johnston said the figures could be a bit misleading because with a smaller number of sales, the median price could be distorted.
In Dunedin, 152 houses sold last month at a median price of $231,000 (compared with 180 in December at $245,000).
Mr Johnston said the figures were not surprising.
January was never a busy month, but he had noticed that there was much more activity this month.
Open homes were attracting much more interest; and multiple offers, "which we haven't seen for a while", were occurring.
Some sellers were hanging on to see what the market was going to do, and it was a bit "awkward to know exactly what something is worth at the moment".
Although interest rates had come down, banks tightening their lending criteria appeared to be affecting some first home buyers.
The future was very dependent on people's confidence in banking and government policies for protecting jobs.
Real estate was a challenge at the moment, but it had been very easy over the past few years and it was not a bad thing that it had settled.
National president of the Real Estate Institute Mike Elford said the number of sales nationally showed people were treading cautiously and reflected the uncertainty of the wider economic environment.
Falling interest rates had yet to have the effect of vitalising the market, and the time it was taking to sell a house, a national median of 59 days, compared with 10 fewer days in January last year, was a symptom of the market's "wait and see" approach.
