(WELLINGTON) New Zealand house sales fell to their lowest level in 16 years in April, the Real Estate Institute of New Zealand (REINZ) said yesterday.

Sales by Real Estate Institute members fell to 4,464 houses in the month, a fall of 13 per cent on March. The figure was 45.5 per cent lower than a year earlier.

It was the lowest monthly sales total since January 1992, when 4,427 properties were sold, REINZ said.

'April shows that the loss of confidence in the housing market is deeper than we had anticipated,' national president Murray Cleland said in a statement.

The REINZ national median house price fell 1.1 per cent to NZ$345,000 (S$363,195) from the month before, to end 1.1 per cent lower than a year earlier.

Business and consumer confidence has eroded sharply over the past two months in the face of high interest rates and reduced activity, leading some commentators to talk of the economy going into recession.

The median number of days taken to sell a house was 44 from 40 in March and 28 days a year ago.

The Reserve Bank of New Zealand, which has kept its official cash rate at a record 8.25 since July last year, has noted the slowing housing market.

Last week, it said if credit conditions become too tight because of a re-emergence of financial market turmoil, the economic and housing slowdown could be exacerbated.

The latest Reuters poll has 12 of the 16 economists surveyed expecting rate cuts to begin by September this year.

Prices fell in five of the REINZ's 12 regions and rose in seven.

'About the only glimmer of hope was the fact that a number of regions saw their median prices recover, suggesting that the March figures were something of an aberration. However, the trend overall is for declining house values,' Mr Cleland said.

Prices in the Auckland region, the country's biggest population and commercial centre, rose 3 per cent, although sales tumbled 16.7 per cent. Prices in the capital Wellington slipped 8.5 per cent. -- Reuters

This article was first published in The Business Times on May 13, 2008

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