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New Zealand house prices fell for the third consecutive month in June, with low turnover and a lack of buyer demand set to continue over the coming months, property valuer Quotable Value said on Monday.
In a separate survey by ASB Bank, data showed confidence in the housing market was flat in the three months to July, while there has been a broad-based decline in the proportion of respondents who expect house prices to rise.
Quotable Value's residential house price index rose 4.1 per cent in the year to July, down from 5.2 per cent in the year to June and a 5.6 per cent rise in May. Although the index is still up on a year ago, the gain is mostly due to a big rise late last year and the recent decline indicates that prices have effectively been falling for the past three months.
The volume of sales is about a third below the long-term average, said Quotable Value research director Jonno Ingerson, with buyers shelving plans to enter the market in favour of reducing debt. "The lack of buyer demand, combined with an increasing supply of unsold houses, is causing values to gradually drop," he said. The traditional winter slowdown combined with concerns about rising interest rates and job security could conspire to keep the market slow for some months yet.
"If this is the case, then we would expect to see values continue to ease back," Ingerson said.
Despite the index falling, the average sale price increased 0.6 per cent to NZ$407,191 (HK$2.31 million), compared with a 0.4 per cent rise in June. House prices in Auckland, New Zealand's biggest city, were 6.9 per cent higher compared with 7.9 per cent in June. Price growth in the capital, Wellington, eased to 3.2 per cent from the previous month's 4.1 per cent gain.
The monthly residential price report, which is not seasonally adjusted, is based on sale prices of properties over the past three months compared with the same period a year earlier.
ASB Bank chief economist Nick Tuffley said house prices would remain subdued as expectations of further rises had declined.
"Beyond 2010, we expect weak house price growth, although population growth will provide some support," he said, adding that migration would be a key influence on housing demand.
The ASB survey showed a net 29per cent said it was a good time to buy a house, unchanged from the previous survey three months ago and 54 per cent in July last year.
This article can be found on South China Morning Post, Wednesday, August 11, 2010

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