Real Estate Institute New Zealand (REINZ) recently released a report that showed that property prices across the nation dropped significantly in May. However, other real estate experts have claimed that when you adjust the figures for seasonal differences, the statistic is not as worrying as it could be. Meanwhile, property investors are picking up good bargains while the prices are low.

In April 2010, the average asking price of new listings coming onto the New Zealand property market was $422,520, but the average price in May was just $407,349, a drop of more than $15,000. REINZ statistics suggest that new sellers are pricing to meet the market, as there is a glut of unsold properties still on the market.

When comparing sales figures from April 2010 to April 2009, you can see that more than 1000 additional properties sold last year. The slow rate of sales over the past two months in New Zealand has enticed new sellers to price lower than comparable properties to gain quicker sales.

REINZ collected statistics for 19 regions, 12 of which had a fall in asking price compared to the recent 3 month period. Northland, Coromandel, and Nelson show falls in prices that reflect the seasonal changes, as investors sell holiday accommodation at the end of summer.

These holiday regions experienced a similar fall in price at this time last year, so it is hard to take too much notice of the fall in these regions. New listings in Auckland show the real trend though, with a fall of 2.5 percent in asking price in May, compared to the most recent three months.

Wairarapa and the West Coast regions both saw an increase in price, although with fewer new listings in these regions, there is less pressure on sellers to reduce the prices. Only five other regions registered an increase in asking prices, but the increases were generally quite small.

May is traditionally a slower month for sales in New Zealand anyway, and some investors did hold off on purchases until after the government released the budget on May 20. However, real estate agents did not see a dramatic change in new listings, or asking prices following the budget announcement.

Real estate agents are receiving many new listings of lifestyle properties, as May was the fourth month with more than 1,100 new listings of these types of properties. However, the mean asking price for these properties has fallen from $601,000 in January to just $504,557 in May. This means that investors and people wishing to purchase a lifestyle property can pick up some good bargains throughout the country, especially in Auckland, where sellers listed 345 lifestyle properties in May (an increase of 64% from May 2009 listings).

The average asking price for a lifestyle property dropped by 13% compared to May 2009 figures, and 9 % when compared to the three month average of February, March, and April.

Auckland also had more new listings apartment style properties in May than anywhere else in the market, with an increase of 20% compared to the new listings in May 2009. The asking price dropped to $344,541, which is 5% less than the average of the last three months and 2% compared to same time last year.

The trend of the property market being a buyer’s market instead of a seller’s market has continued in May and will probably continue for the next few months. However, some places, such as Wellington and Taranaki, are showing signs of moving towards a balanced market, where neither buyers nor sellers will have the upper hand.

While the average asking price for new listings continued to drop in May 2010, there are plenty of investment opportunities throughout New Zealand. The buyers’ market continues, so investors can pick up good bargains in many regions. The market in Auckland is particularly strong.