Queenstown appears to be the area hit hardest by a softening Otago real estate market.
Statistics released for February show the Otago market was varied, with North Otago and South Otago both showing some life. Queenstown was battling, with house sales in the resort only about half last February's and mortgagee sales occurring.
Real Estate Institute of New Zealand (REINZ) national president Murray Cleland said a further weakening of prices would see the market fall.
He questioned the wisdom of interest rate rises, which could curb inflation but leave some property owners with negative equity, and ‘‘unhappy conversations with their bank''.
REINZ Dunedin branch president Liz Nidd said the Dunedin market was levelling off, but was not as bleak as many people were painting it.
‘‘We are 14.5% down in terms of volume, which is not too bad compared to other centres.
‘‘People need to price their property right, or they will get hurt. I think the price will come right, rather than there be a major correction.''
She said the 42 days it took to sell a property in Dunedin - down from 52 in January - showed there was still activity in the market.
People who used council property valuations to set their price were misguided, as the valuations did not reflect the market.
The top end of the market - properties selling for more than $600,000 - was the slowest.
Investors were scarce, and the median price had varied between $240,000 and $260,000 for the past 18 months.
REINZ Queenstown spokesman Adrian Snow said Queenstown was no different from the rest of the country, and property sales had been slow since November.
Buyers were selective and taking their time making offers.
Many people were waiting to sell their property before looking to buy another house.
Mortgagee sales were occurring in Queenstown for residential properties, he said. The top end of the market - above $1 million - was holding up, but sales for properties valued between $600,000 and $1 million were very slow.
Properties below $600,000 were also slow to sell now. Investor interest had been sluggish for a long time and the apartment market was oversupplied, with about 200 units for sale.
In addition to this, another 1000 apartments were due on the market within the next two years.
REINZ Central Otago-Lakes branch spokesman Ross Rainsford said the region was not large, so figures could change markedly because of one big sale.
There were houses for sale but not much land, and houses were taking longer to sell.
