Wellington, Oct 14 NZPA - The early September earthquake in Canterbury dragged down already weak figures for the residential property market last month.

Figures from the Real Estate Institute of New Zealand (REINZ) put nationwide sales last month at 4323, just up from 4287 in August, but well down on the 6464 a year earlier although only a little weaker than the 4499 in September 2008.

In Canterbury/Westland the 396 property sales were down 227 from the previous month and less than half that recorded for September 2009.

While the nationwide median price of $350,000 last month was unchanged from that of August, or from that of September 2009, in Canterbury/Westland it was down to $297,500 from $315,000 in August and $311,500 a year earlier.

The REINZ monthly housing price index dropped 0.3 percent in September, while in the three months to September housing prices as measured by the index were down 1.2 percent. The index was 1.3 percent lower than a year earlier.

The price index, which is basically an average of sale prices for common groups and is seen as a more accurate reading of price trends, was down 5.5 percent in Christchurch from a year earlier.

In Auckland it rose 2.3 percent, in Wellington it was down 0.3 percent, while for the North Island outside Auckland and Wellington it fell 3.7 percent, and for the South Island apart from Christchurch it was up 0.7 percent.

Goldman Sachs JBWere economist Bernard Doyle said nationwide house sales were down 6.7 percent last month from August on a seasonally adjusted basis, but making a rough adjustment for Christchurch sales volumes were close to unchanged for the month.

While prices were weakening, flat volumes hinted at stabilisation creeping into the housing market but the bar was low, with volumes plumbing the lows of the global financial crisis, Mr Doyle said.

"Accordingly we are still looking for signs of outright volume recovery in response to a shift lower in fixed mortgage rates."

ANZ economist Mark Smith said that the market would receive much needed support, with the Reserve Bank expected to hold off raising rates until early next year.

While normally low sales volumes would point to ongoing weakness in residential construction activity, that was not the case now, he said.

Building consent issuance had been trending up, with households appearing to be taking advantage of the greater availability of builders to start work. Earthquake reconstruction work would also provide a much needed boost to the construction sector over 2011.

The REINZ figures showed the national median number of days to sell remained steady at 43 for September, the same as the previous month, but it was 10 days longer than the 33 days in September 2009.

REINZ spokesman Bryan Thomson said that while sales continued to remain subdued across the country, some of that could be attributed to uncertainty over the rise in GST and tax cuts, and also shocking spring weather.

"We would expect to see a pick up in the market in coming months as warmer spring and summer weather generally brings an influx on new property listings onto the market providing more choice for buyers," Mr Thomson said.