New Zealand house prices continue climb

New Zealand house prices continue climb

Friday, May 18, 2007

The annual pace of New Zealand house value growth accelerated for the third straight month in April, but higher interest rates were expected to slow the market over coming weeks, government agency Quotable Value said.
The agency's residential house price index rose 10.6 percent in the month from a year earlier, up from a 9.8 percent rise in March and a 9.3 percent gain in February.

The pace of growth had been slowing through 2006 after peaking at 16.8 percent growth in January last year.

"The market has continued unabated over the last month on the back of stronger-than-anticipated migration and high levels of employment creating steady demand, especially in the lower end of the market," QV spokesman Blue Hancock said.

The Reserve Bank of New Zealand raised the cash rate April 26 for the second month in a row, setting it at 7.75 percent on concerns about growing inflation pressures stemming from the robust housing market and strong domestic spending.

But Hancock said: "With the higher interest rates and the onset of the winter season, we can expect the market to slow over the coming weeks."

The QV data showed the average sale price for New Zealand houses was NZ$366,032 (HK$2.11 million), up 0.8 percent on March.

Prices in the main regions showed strength, with the capital Wellington rising 13.4 percent and Christchurch up 11.8 percent on a year ago.

Auckland, the biggest population and commercial center, rose 6.6 percent, off the 7.5 percent growth marked in March from a year earlier.

The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the corresponding three- month period a year earlier.

REUTERS