New Zealand
Written on April 14, 2008
New Zealand's house prices rose at the slowest pace in more than three years in March as record-high interest rates curbed demand for property.
Prices gained 6.5 percent from a year earlier, Quotable Value New Zealand Ltd., the government valuation agency, said in a report released in Wellington today. That's the slowest pace since the monthly series began in February 2005.
Home-loan interest rates have soared the past year, forcing buyers out of the market and requiring vendors to accept lower prices. The weak housing market will prompt Reserve Bank of New Zealand Governor Alan Bollard to cut the benchmark interest rate from 8.25 percent this year, according to 7 of 12 economists surveyed by Bloomberg News.
“The market is continuing to soften, with more listings and fewer buyers leading to reduced demand,'' said Blue Hancock, a Quotable Value spokesman cash advance. “Market sentiment continues to be negative and many investors may be seeking to reduce their exposure to increasing mortgage costs.''
The number of house sales in March slumped 53 percent to a seven-year low, the Real Estate Institute said on April 11. The median time it took to sell a house jumped to 40 days from 27 days a year earlier, the institute said.
The interest rate on two-year mortgages was 9.55 percent in February compared with 8.38 percent a year earlier, according to central bank figures.
Filed in: business.