Golding: House sales down 30%

The issues at play include global economic factors, national and political matters, less positive sentiment, interest rates and the National Credit Act.

"There is much speculation in regard to the current situation in the residential property market, and unfortunately generalisations being bandied about in the marketplace in regard to house prices are dangerous," he said.

He added that although the outlook for the market seemed gloomy, with sales volumes down by between 20-30% y/y, the residential market was robust enough to deal with the changing dynamics.

"Prices will adjust in line with supply and demand, but fundamentally there are still valid reasons for residential homes to trade and there is certainly no need for panic selling, in fact quite the contrary," he said.

He added that it was unlikely that sellers would achieve a premium price in the current conditions, with some properties selling 20% below asking price.

Noting that the market comprised a broad mix of areas, sellers would still be able to achieve a premium price in areas where values were still appreciating.

"We are currently in a consolidating market, and while there is a contraction, the reality is not as gloomy as is presently being portrayed in some of the commentary - which serves to only further dampen sentiment," he said.

However, he warned that any further interest rate increases would adversely impact demand and increase the potential for distressed selling - an unfortunate combination that would probably lead to downward price adjustments and a slower market.

- I-Net Bridge