Figures from the Real Estate Institute [REINZ] show 269 fewer houses were sold in Otago in May compared to the year previous and in Southland there were 115 fewer sales.
Only Tasman had a bigger percentage drop — with 50 fewer houses sold and a drop of 62.5%. Otago sales dropped 56.2% where as Southland fell by 54.8%.
Queenstown-Lakes was one of only two regions in the country to get an increase of listings on the same time last year, up by 21.8%.
"There are significant numbers of active buyers in the market, many of them from surrounding areas in the South Island in addition to expats looking to invest with the view of returning to New Zealand in the future," Queenstown Lakes REINZ regional director Gail Hudson said.
"However, the negative commentary around the tourism Industry means that many of these buyers are reluctant to commit at present. Bank lending continues to remain an additional challenge for purchasers."
Median house prices for Southland jumped 22.8% on last year to $345,000. In Otago median prices were up 5.2% to $505,000.
"The number of residential properties sold across New Zealand decreased by 46.6% in May when compared to the same time last year which is not surprising given we had the Alert Level 3 restrictions for the first 12 days of May," REINZ chief executive Bindi Norwell said.
"These restrictions meant only two property viewings per property, per day were allowed, making it difficult to get interested parties through a property in a timely and efficient manner."
She said there was a shortage of new listings coming to the market, which was flowing on to reduced sales numbers.
"Hopefully, as people’s confidence starts to lift as we move through the Alert Level systems the listings shortage will start to change."
From April to May there was an increase in sales of 191% as the country moved out of lockdown.
Nationwide sales, excluding Auckland, dropped 47.4% in May and in the country’s biggest city sales dropped 44.5%.
Median house prices across New Zealand increased by 6.9% in May to $620,000, up from $580,000 in May 2019.
