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RPT-NZ house price growth eases, worse to come - QV

Reuters - Monday, May 12

WELLINGTON, May 12 - New Zealand house price growth eased for an eighth straight month in April, government agency Quotable Value said on Monday, as high interest rates and falling demand continued to bite, with prices seen falling in coming months.

QV's residential house price index rose 4.9 percent in the month from a year earlier, compared with 6.5 percent in March and 7.7 percent in February.

"Over the first three months of 2008 we are beginning to see property values easing back over most areas of New Zealand," QV spokesman Blue Hancock said in a statement.

"With property listings still high, buyer demand reducing and the typical slowdown through winter, we would expect this trend to continue and our monthly statistics will likely show declining values in the coming months."

Mortgage rates have been kept high by the Reserve Bank of NZ's hawkish anti-inflation policy and also by the credit market turmoil, which has flowed through into banks' lending rates.

The central bank governor, Alan Bollard, said last Wednesday he expected a moderate slowing in the New Zealand economy, although any worsening of the global outlook or a re-emergence credit market turmoil could see a sharper decline.

A string of weak economic data has seen analysts bring forward their expectations for interest rate cuts, with the latest Reuters poll showing most of the 15 economists surveyed now expect a cut in September.

QV said the annual rate of growth for Auckland, the biggest population and commercial centre, slipped to 3.2 percent from 6.2 percent in March, while house price growth in the capital Wellington eased to 5.3 percent growth from 7.4 percent.

The South Island's main city, Christchurch, slowed to 4.6 percent from 5.8 percent. Virtually all other regional centres recorded slowing growth to the extent where house prices were only slightly above the same time last year.

The QV data showed the average sale price for New Zealand houses little changed from March at NZ$388,465 , mainly because of a larger number of low value sales.

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. The data is not seasonally adjusted.

Last month, data from the industry group Real Estate Institute of New Zealand showed house sales at their lowest level in seven years, with house prices just 1.6 percent higher than a year ago.

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