The Queenstown real estate market was "performing in a very stable manner", hampered only by the low numbers of properties for sale, Real Estate Institute of New Zealand (REINZ) spokesman Adrian Snow said.
While sales last month were slightly down on April sales, Mr Snow said Queenstown realtors were "relatively pleased" with May results.
This May was up on May 2008 and "fits perfectly into the normal seasonal trend of May and June being the quiet months of low visitor numbers".
Mr Snow said the Queenstown market had demonstrated a slow gain in confidence and activities.
"Realtors are reporting low numbers of properties for sale which is now impeding potential sales, as good numbers of buyers are reported as being active and looking for property to purchase.
"Signals from the local banks are suggesting that lending criteria are beginning to ease, which could also add to potential buyer activity.".
Despite the low supply "theoretically offering a swing in favour of the vendors", most realtors had reported negotiations were often difficult, with no impact on property pricing yet, he said.
"The big picture shows a continuation of the gradual increase in market confidence since January 2009 and a continuation of May's statement of positive news," Mr Snow said.
Last month, 45 houses were sold, down 30% from April 2009 (64 sales), but up 18% against May 2008 (38 sales).
Residential section sales followed the same pattern, with nine recorded for May 2009, down 18% on April 2009 (11) and 200% up on May 2008 (3).
Mr Snow said apartment sale numbers "took a slump" with six recorded last month, compared to 18 in April 2009 and 10 in April 2008.
"The apartment segment of the market continues its stressed state with mortgagee sales being the dominant force in setting market values, with price trends remaining strongly downwards."
The median for residential dwellings last month was $500,000, up from April 2009's $421,250.
Other positive news included five more property sales recorded in the REINZ rural property category; 10 sales for Arrowtown and five sales over $1 million being recorded in Queenstown last month.
