Auckland house market sapped

Tuesday 12th August 2008

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.

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By Jonathan Underhill

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