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Auckland house market sapped

Tuesday 12th August 2008

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House prices in Auckland fell last month and the number of property sales dwindled, suggesting the economy’s slump has sapped demand in New Zealand’s biggest city.

The median house price in Auckland fell to NZ$421,000 from NZ$435,000 in June, according to the Real Estate Institute. Property sales tumbled 42% from July 2007, to a “dismal” 1,411, the institute said in a statement.

Auckland lagged behind the rest of the country. The national median house price was unchanged at NZ$340,000, a sign that the real estate market recovered last month, according to REINZ president Murray Cleland.

“It’s not surprising that Auckland is finding itself very much at the epicentre of the current economic recession and in particular the continued fallout from the finance sector collapses,” Cleland said. “Confidence in the Auckland residential market at this point is pretty low.”

The REINZ’s statement contrasts with Quotable Value’s report this week showing residential property prices fell 2.2% in July after gaining just 0.1% in June.

Government figures show home building consents tumbled 20% in June, adding to evidence the housing market is contributing to a weakening economy. Many economists predict the central bank will cut its official cash rate at every opportunity this year to stoke an economy that probably shrank in the first half.

To find out what is happening in your region click here

By Jonathan Underhill

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