House sales in UK down despite 'realistic' prices

House sales in Britain have dropped to a record low, though asking prices are becoming more realistic, the Royal Institute of Chartered Surveyors said yesterday.

The average number of transactions per surveyor in the May-July quarter was 14.4, the lowest figure the institute has ever recorded, the institute said in a report.

However, it detected signs that realism was returning to the market, with many sellers dropping their asking prices. "In June, surveyors reported that predatory buyers were bargain-hunting for property," the report said.

"This month, surveyors report that realism has returned to the market with many sellers dropping asking prices to more realistic levels," it said.

The number of surveyors reporting a fall in new buyer inquiries was 27 per cent higher than those reporting a rise in July, the report said. But that was an improvement from May when the number reporting a drop was 50 per cent higher than those reporting an increase.

"The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species," institute spokesman Ian Perry said.

"Going forward, there are signs that sales activity might pick up a little as sellers start to re-evaluate prices."

Meanwhile, sales of New Zealand houses fell 33 per cent from a year earlier in July as record-high interest rates curtailed demand.

The number of homes sold dropped 33 per cent to 4,489 from 6,660 a year earlier, according to a report from the Real Estate Institute of New Zealand. Sales rose from a 16-year low of 4,305 in June.

Slowing consumer spending and a plunge in the housing market tipped New Zealand's economy into a recession in the first half of this year, prompting Reserve Bank Governor Alan Bollard to cut interest rates last month. Further declines in the home sales suggest the central bank will keep lowering borrowing costs.

The median house price dropped 1.5 per cent from a year earlier to NZ$340,000 (Dh869,349). Prices were unchanged from June.

The median time it took to sell a house increased to a record 58 days from 53 days in June.

The institute said the increase in sales from June and an unchanged median price may suggest the property market is steadying.

"The trend-line is certainly not deteriorating as much as some would have you believe," said institute President Murray Cleland. "If this is as bad as it gets, then perhaps the market is in better shape than we thought."

In Auckland, the nation's largest city, sales fell 42 per cent and the median price declined 5.4 per cent.