House sales cool despite rates war

Real estate sales were down sharply from the peak late last year, with prices about to follow, dropping by 5 per cent to 10 per cent next year, economists said yesterday.

Real Estate Institute figures out yesterday show the national median price rising slightly to $252,000 in October, with prices up in Wellington, Auckland and Canterbury. But the number of homes sold in October was just under 8200, down about 25 per cent from the same month last year, though still above the monthly figures in 2001, before the house price boom.

That fall in sales reflected a slump in sales of homes worth less than $400,000 in the past year, an indication that prices were out of reach for some lower-income earners, economists said.

Institute president Howard Morley said recent fixed-term interest rate cuts would help improve confidence in coming months. The Auckland property market was "resisting predictions of an imminent Armageddon", he said.

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