Housing market hits wobbles

The indicator, which runs from negative 10 to positive 10, showing a strong downturn or upturn in the housing market, fell slightly to a positive 5.23 in January, from 6.67 in December.

It is a sensitive measure of the housing market and includes three main factors: Changes in the number of houses sold, changes in price and the time taken to sell a house.

"Although nationwide PCI was still positive in January 2010, the steadying of the housing market has dropped off," says Mike Pero Mortgages CEO Shaun Riley.

"Sales volumes in January were 1.1% lower than a year earlier, the first decline in activity since February last year."

The median house price for January dropped $10,000 from the previous month, but was still up 7.7% from January 2009.

The third measure of the PCI, the time taken for houses to sell, was up 10 days from December last year, to 43 days.

"The average number of days to sell property showed its typical seasonal increase in January," Riley says, although it was still 16 days less than in January last year.

Northland was the only North Island region where the housing market gained momentum in January, according to the PCI. It showed a positive 3.56, up from 3.35 in December.

Auckland slipped slightly, with a PCI of 7.88 last month, down from 8.67 in December, and Wellington lost ground, down to 7.1 from 9.37 in December.

In the South Island, the Central Otago Lakes region was back in positive territory, after two and a half years, with a PCI of 0.3, up from negative 0.15 in December. Southland's PCI increased to 2.28 from 2.2, Nelson/Marlborough was 2.3, from 3.08, and Otago also lost ground with a PCI of 2.64, down from 3.54 a month earlier.