Central Otago house prices plummet

Central Otago and Queenstown house prices have taken a hammering - with properties losing more than a quarter of their value - despite the real estate market improving elsewhere in the country.

In contrast to positive signs in the Auckland, Taranaki and Southland real estate markets, Central Otago Lakes' median house price has dropped by more than a quarter, according to the Real Estate Institute of New Zealand (REINZ).

House prices in the Central Otago Lakes district fell from a median of $565,000 in July 2008 to $411,000 on July 2009 - a drop of 27.25 percent.

"This is probably a flow on from the international economic markets. Foreign investors tend to liquidate property investments in Queenstown as a result of the global recession," institute president Mike Elford said.

Overall sales data showed July's median house price of $340,000 is the same as June 2009 and also identical to July 2008. It was just marginally down on the $345,000 in July 2007 and well up on the median prices for the years 2000 through to 2006, which ranged between medians of $170,000 to $312,500.

Volumes have been similar with 6014 properties sold in nationally in July 2009 compared with 6040 in June. The figure was well up on the 4489 sold in July 2008.

"The market has certainly recovered well from the lows of mid-2008," Mr Elford said. "You wouldn't call it brilliant, but there are positive signs such as more listing stock."

Another positive sign was the length of time to sell a property, he said.

In July 2009 the median number of days to sell a house was 37, compared with 58 days in the same period in 2008. The figure for June 2008 was 41.

The number of days dropped sharply in Southland from 49 days in June to 35 days in July, and in Otago from 55 to 40.

Northland dropped from 72 to 51, Waikato/Bay of Plenty from 56 to 47 and Otago from 55 to 40.

Mr Elford said the 4.51 percent increase in median house prices for July 2008 to July 2009 in Auckland (from $421,000 to $440,000) was a sign of an improving market.

There was significant growth in Southland with a 10.46 percent jump from a median house price of $172,000 July in 2008 to $190,000 in July 2009.

A good increase was also seen in Taranaki which rose 5.69 percent from July 2008 to July 2009 with median house prices going from $265,000 to $280,100 -- a sign of regional business confidence, Mr Elford says.

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