11 Feb 2010

House sales slump in January, figures show

7:59 pm on 11 February 2010

House sales in New Zealand slumped in January amid concerns about tax changes and rising interest rates, according to new figures from the Real Estate Institute.

The figures, mistakenly put on the institute's website ahead of their formal release on Friday, show sales fell an unadjusted 26% last month, after holding steady for much of last year.

The figures show there were more than 3,660 completed house sales throughout the country in January.

This was down 26% compared with more than 4,950 in December and 17% lower when seasonal factors were taken into account.

The median price fell $10,000 during January to $350,000, trimming the annual increase from 9.6% to 7.7%.

NZIER economist Shamubeel Eaqub says uncertainty around possible tax changes and higher fixed interest rates were to blame.

Mr Eaqub says further interest rate rises will weigh on the market and could tip the economy back into recession in the first half of this year.