While national real estate house prices remain volatile, Southland values continue to outperform the New Zealand 5 year average by almost 100%, according to the latest Real Estate Institute of New Zealand (REINZ) report.

Southland houses increased in value by an average 12.1% compared to a national increase in the house price index of just 6.2% (8.5% excluding Auckland) for the last 5 years.

And while the last 12 months have been tough for residential investors with values slipping 13.9% nationally, average Southland house values dropped just 6%.

Last month (Jan 2023) saw a 2.1% slip in Southland house values and the average time it takes to sell a house extended to 51 days (from a 10 year average of 42).

Just 71 houses were sold across Southland in January, compared to 100 for the same month last year.

Invercargill City sales recorded the biggest drop in volume (34%) however the median sale price remained firm, lifting slightly from $425,000 to $435,000.

Gore district sales also dipped (31%) with their median price also dropping from $420,000 to $315,000.

Southland District sales however remained steady with just one more sale for January than the same month last year, and the median price moving slightly from $480,000 to $475,000.

Todd & Co Reality managing director Mike McCurdy said [sales volume] numbers were pretty low, back 24% on the 10 year median, compared to other years.

However house prices hadn't changed for 2 years and with prices going up 8% a year it was still a good time to buy, so long as buyers could finance it, McCurdy said.

He said local families and first time buyers were still in the market, however changes in government regulations had meant no real [property] investors had been around for the last 18 months.

McCurdy said Todd & Co Reality currently had 290 houses on the market, which was about normal.

Fiordland Real Estate owner Don McFarlane said they had seen more listings since December, including the usual lift in listings at the end of January, but that prices appeared to be quite stable.

He said Te Anau had been fairly full with obviously a lot of Air BnBs going on, which were keeping people afloat.

However there were positive signs that the market was starting to stabilise with some banks now starting to drop their 3-5 year interest rates, McFarlane said.